Simulating policy options for universal child allowances in Ghana

Working and discussion papers
December 2018

This paper uses the micro-simulation model ‘GHAMOD’ to consider the case for universal child allowances in Ghana. The paper follows up on findings from a study of 14 middle income countries that used similar simulations to consider the poverty reduction effects of transfers to children funded by a budget set at 1% of GDP. The paper first looks at who Ghanaian children live with and finds that transfers to children would go to 67% of households that contain 87% of the population, making any effects on living standards very small but widespread. Children in Ghana are also not largely over-represented in the lower quintiles of the population. The paper then considers three different design options for universal child allowances to increase their poverty reduction effect and finds that a ‘per child’ allowance weighted to be more generous to the bottom 40% of households would have better impacts on poverty than other approaches.