CONDITIONAL CASH TRANSFERS (CCTs), EDUCATION AND LABOR MARKETS: An inquiry into poverty reduction in Ghana through the Livelihood Empowerment Against Poverty (LEAP) program

Abstract: Conditional Cash Transfer (CCT) programs aim to alleviate short term poverty and reduce intergenerational poverty by supplying targeted poor households with cash transfers contingent upon certain program parameters, such as school attendance for children. Evaluation on CCTs have found that such programs generally increase school enrolment and school attendance but its subsequent effect on labor market participation is only assumed without sufficient evidence. CCTs have since its inauguration in Latin America in late 1990s gained worldwide diffusion. In the case of Ghana, that is the Livelihood Empowerment Against Poverty (LEAP) program. This study aims to inquire into structural barriers and constraints in the educational system and prevailing labor market structures, as identified through a case-driven case study with 20 interviewed benefitting Orphans and Vulnerable Children (OVCs) and supported with macro-statistics and existing research, that influence the success of LEAP in breaking chronic poverty in Ghana. The concept of chronic poverty and informal economy underpins the analysis that finds that (1) LEAP can only have limited effect on educational attainment as income and geographical disparities within the educational system disadvantage rural poor in terms of the level and quality of education they reach and receive, and (2) within the prevailing labor market structure in Ghana, education can only have significant impact on type of occupation, sector of employment and income for a few highly educated urban residents. This study maintains that without reforms in education and labor markets, LEAP will have little effect on breaking chronic poverty in Ghana.