geographical differences in how individuals and families ... · in lower/lower-middle income...
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Geographical Differences in How Individuals and Families Save for Education:
A Global Analysis
Moses Okumu, MSW University of Toronto
David Ansong, PhD, MSWUniversity of North Carolina at Chapel Hill
Frank Otchere University of North Carolina at Chapel Hill
2018 Esri Southeast User Conference
May 3, 2018
2
Primary (1st-6th Grade)
Junior High (7th–9th Grade)
Senior High (10th–12th Grade)
Tertiary
Returns on Education
Greater returns
on education
investment at
higher education
levels
Education plays a transformative role in fostering the social, cultural, and economic well-being of individuals and societies.
Models of Education Financing
3
Education funding models
Tuition free (subsidies)
Scholarships
Student loan
Education savings
accounts
Increasingly, families are expected to bear some of the
cost of schooling, especially at the post-secondary level.
Why and How People Save? Theoretical Explanations
Financial socialization
People learn the importance of and how to save from their parents and other socialization agents
Behavioral economics
“Choice architecture” shapes financial decisions
Neoclassical economics
Poor people save for precautionary
purposes
Institutional structures
Access, Information, Incentives, Facilitation,
Expectations, Restrictions, & Security
Study Aims
5
1. To understand how earnings and access to formal savings accounts facilitate the odds of saving for education.
2. To examine if there are underlying distinct spatial profiles of how people save for education.
Data Sources
6
2014 Global Findex Database
• 150,000 people in 143 countries
• In each country, a nationally representative sample of approximately 1,000 people
• Age 15+ years
World Bank’s World Development Indicators
• Country-level data
Measures
Outcome • Saves for education (Yes/No)
Predictors of interests
• Account ownership
• Income (Wages, government assistance, & agricultural income)
Individual-level
covariates
• Age
• Gender
Country-level
covariates
• Government expenditure per student
• Income status
7
• Income quintiles
• Education level
Data Analysis: Grouping Analysis
• Hypothesis:
– a 4-group profile based on the income status (high, upper-middle, lower-middle, lower income).
• ArcGIS Grouping Analysis tool:
– Calinski-Harabasz pseudo-F-statistic (Within-group similarity: Between-group difference)
– No contiguity or proximity restrictions.
8
5 measures who saves for
education/ school fees
Overall population
Females
Males
Adults
Youth
Rural residents
Aim: Understand underlying distinct spatial profiles in saving habits.
Data Analysis: Multilevel Modeling• Used ArcGIS graphical tools to assess country-level variability and need
for multilevel modeling.
• Intraclass correlation coefficients (ICCs) : .10 - .11
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World
Freq.(%)
Sub-
Saharan
Africa
%
OECD
%
Latin
America &
Caribbean
%
East Asia
& Pacific
%
South
Asia
%
Saved for education***
Yes 13,033(50) 56 39 52 60 40
Female*** 13,708(53) 47 62 58 59 48
Education***
≤ primary 8,519(33) 41 9 26 44 47
Secondary 13,695(53) 51 66 58 44 45
Tertiary 3,698(14) 8 27 16 12 8
Has an account*** 15,202(58) 53 90 55 63 57
Receives
Wages*** 9,324(36) 31 66 37 35 22
Gov't support*** 3,281(13) 9 28 14 19 6
Farm income*** 7,094(27) 41 4 11 34 31
Descriptive Characteristics
Grouping Results: 3 Distinct Groups
Parallel boxplot showing 3 groups of savers
Pseudo F-statistic plot showing optimal groupings
Grouping Results: 3 Distinct Groups
12
±Saving for education
Lowest
Highest
Average
Results of a spatial grouping analysis showing classification of countries into 3 distinct groups.
Multilevel Modeling Results
13
Fixed Effects
Global
OR(SE)
sub-Saharan
Africa
OR(SE)
OECD
OR(SE)
Has savings account 1.60 (0.15) *** 1.76 (0.21)*** 4.93 (2.09)***
Receives wages 1.10 (0.07) 1.45 (0.13)*** 0.94 (0.31)
Gov't assistance 0.90 (0.06) 0.97 (0.19) 0.77 (0.09)*
Agricultural income 1.44 (0.14) *** 1.32 (0.16)* 1.82 (1.18)
*p < .05, **p <.01, ***p < .001; OR: Odds ratio; SE: Standard error;
Discussion
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Having a savings account
helps
Ownership of a savings account may be more instrumental in fostering the habit of saving for education expenses than being a salary or wage earner.
The saving mechanisms
matters
In lower/lower-middle income countries, saving with a bank may not necessarily be the preferred way to set aside money for educational expenses.
Where you live matters
Compared to high income countries, families in low-income countries are more likely to use the education savings model to prepare financially
for education expenses.
Questions & Discussions
David AnsongUniversity of North Carolina at Chapel Hill
School of Social [email protected]
Thank you!
15Under-resourced School in Ghana