The impact of education in rural Ghana: examining household labor allocation and returns on and off the farm

Abstract

Most of the human capital literature pertaining to developing countries focuses on the returns to education in either farm work or wage work; few studies examine how education affects the allocation of time between these activities. This paper estimates the returns to education in farm and off-farm work, and consequently the role of education in determining the allocation of labor. The results from this study show that off-farm work has a much higher return to education than does farm work and suggest that this divergence in returns affects the allocation of labor in farm households between farm and off-farm work.