Essays on Free Senior High School Policy, Household Behavior, and Environmental Tax Revenues

Author

Prince Fosu, Southern Illinois University CarbondaleFollow

Date of Award

5-1-2023

Degree Name

Doctor of Philosophy

Department

Economics

First Advisor

Sylwester, Kevin

Abstract

Many children in developing countries forgo education due to the direct or opportunity costs of attending school. To help defray the direct costs of secondary schooling, the Ghanaian government launched its free secondary school initiative in 2017, which sought to make tuition and all educational-related expenses free for every Ghanaian child who passed the Basic Education Certificate Examination (BECE). The first objective of this study is to examine to what extent the association between household income and school enrollment decreased in strength over time due to Ghana’s 2017 policy reform using the Ghana socio-economic panel survey (GSPS) and difference-in-differences estimation technique. Our results show that household assets (a proxy for income) had a significant and positive association with school enrollment before the policy change; however, household assets have no significant association with enrollment after the policy change, thus suggesting that family resources do not matter for child enrollment after the policy change. Our results also imply that the 2017 policy reform effectively reduced the hurdles facing lower-income families in paying for secondary school education. The second objective of this study is to examine the effects of this government policy on household labor market outcomes in Ghana. Using the Ghana Socio-Economic Panel Survey (GSPS) and the difference-in-differences estimation technique, we found an increase in labor supply and wages for households with SHS kids before the policy change; however, after policy reform, both labor supply and wages of SHS households decreased suggesting that the free SHS policy did eliminates the direct cost of schooling. These results also indicate that the free SHS policy has significant implications for human capital development and household welfare and health since the policy eliminates the direct cost of schooling. The third chapter examines the impact of environmental tax revenues on domestic healthcare expenditures using panel data of 96 developing and developed countries from 2000 to 2018 and the fixed effect estimation technique. We find a positive and statistically significant association between total environmental tax revenue and government health expenditures; however, this finding is primarily driven by low-income countries. In addition, we find a positive effect of all kinds of environmental tax revenues on government health expenditures; however, the largest and strongest effect arises with pollution tax and transport tax respectively. Our empirical results confirm the validity of the double dividend hypothesis, thus suggesting that environmental tax revenues have significant implications for public health expenditures.