Addressing the Burden of Education Financing in Low and Lower-Middle-Income Countries: The Role of Savings Accounts, Cash Transfers, and Other Income Sources

David Ansong, Moses Okumu, Frank Otchere, Isaac Koomson, Michael Sherraden

Research output: Contribution to journalArticlepeer-review

Abstract

Cost-sharing between governments and families remains a strategic part of many governments’ post-secondary education funding policies in low-income countries. This shift to more cost-sharing raises questions about how households meet their contributions to post-secondary schooling costs. This study uses data from the World Bank’s Global Financial Inclusion survey and World Development Indicators to examine how savings account ownership, cash transfers, and other forms of income shape families’ decisions about education financing in 59 low and lower-middle-income countries. Results from generalized hierarchical linear modeling and logistic regression models show that individuals with savings accounts are more likely to dedicate resources to educational purposes than those without accounts. Other forms of income (cash transfers excepted) also predict an individual’s likelihood of earmarking savings for education to a lesser degree. Our findings offer compelling evidence that greater access to formal savings services may provide a viable long-term strategy to help families prepare financially for their children’s future education. These findings may inform future programs that promote financial inclusion and expand access to formal savings services to help individuals and families save for their children’s education.

Original languageEnglish (US)
Pages (from-to)745-756
Number of pages12
JournalJournal of Family and Economic Issues
Volume42
Issue number4
DOIs
StateAccepted/In press - 2021
Externally publishedYes

Keywords

  • Cash transfer
  • Education funding
  • Generalized hierarchical linear modeling
  • Low-income country
  • Lower-middle-income country
  • Savings account

ASJC Scopus subject areas

  • Social Psychology
  • Economics and Econometrics

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