Special Economic Zones and Household Welfare: New Evidence from Ghana

This study evaluates the impact of Special Economic Zones (SEZs) on household welfare (per capita consumption expenditure or PCE and poverty) in Ghana using the Ghana Socio-economic Survey Dataset. Propensity Score and augmented inverse probability weighting (AIPW) are used to provide a multi-valued treatment framework to estimate the effect of SEZs on household welfare. The results show that households located within a 20 km radius near of SEZs seem to have higher PCE and reduced poverty compared with households farther away. The results of the PCE effect using different household characteristics provide a strong basis for a deeper understanding of the heterogeneous effect of SEZs on PCE in Ghana. While data limitations prevented the study from fully identifying the direct channels at work, it was able to investigate the indirect channels, suggesting that SEZs in Ghana may induce employment restructuring effects for individuals in paid employment or farming.