Labour Market Participation Effects of Information and Communication Technology Across Different Years of Schooling in Ghana

Abstract

Understanding how the adoption of information and communication technology (ICT) interacts with years of schooling to impact labour market participation is crucial for developing inclusive digital job policies in emerging economies. Using a sample of 14,009 households from the Ghana Living Standard Survey (GLSS7), this study applies a recursive bivariate probit model to address the possibility of endogeneity between ICT adoption and labour market participation. The findings demonstrate that, after controlling for endogeneity, ICT adoption significantly decreases labour market participation by 24.3%, particularly among household heads with lower or no formal education. However, this negative influence diminishes with additional years of schooling and turns positive beyond roughly 16 years of education, underscoring the complementary influence of higher education. These findings support the Human Capital Theory, which emphasises productivity-improving effects of education, and the Skill-Biased Technological Change proposition, which posits that technical progress favours skilled workers. However, the results reveal that ICT-induced inequalities may worsen among household heads with lower education. Therefore, policymakers should prioritise investments in educational and digital skill training programmes, including expanded access to STEM and vocational ICT training, to guarantee that ICT adoption promotes inclusive and sustainable labour market participation in Ghana.