The Link Between Poverty and Social Exclusion in Ghana: An Econometric Approach

Abstract

Poverty and exclusion are two interrelated concepts and each one reinforces the other. Theoretically, it is postulated that there is a connection between social exclusion and poverty. In other words, exclusion affects poverty through several channels but this link has not been tested econometrically in Ghana. Therefore, this study examines the link between poverty and social exclusion using the Probit and 2SLS estimation technique with the view to isolating the relevant social exclusion factors that significantly account for poverty for policy purposes. The data used for the study were extracted from GLSS 5. The study reveals that education plays a major role in poverty reduction. Poverty is associated with age and household size in a non linear fashion. In other words, the effect of age on poverty follows a certain pattern. Individuals who are excluded from employment are more likely to be poor. The policy implications are that government should take human capital development seriously. Again, there must be efforts to address social exclusion since it affects poverty.