G.J.I.S.S.,Vol.3(3):216-220 (May-June, 2014) ISSN: 2319-8834 216 USING FACTOR ANALYSIS TO DETERMINE POVERTY REDUCTION VARIABLES, INTERNAL MIGRATION AND DEVELOPMENT IN GHANA Nicholas Awuse 1 & Patrick Tandoh-Offin 2* 1 Bolgatanga Polytechnic, P. O. Box 767, Sumbrungu, Bolgatanga, Ghana. *2 Ghana Institute of Management and Public Administration (GIMPA), Box AH-50, Achimota-Accra. Abstract This study determines how factor analysis can be used to categorize poverty reduction variables, internal migration and to promote development in Ghana. The purpose is to find out which variables accounts for poverty reduction efforts in Ghana especially those that have implications for rural livelihoods. A total of 345 questionnaires from seven regions of Ghana were used to gather data from migrant-concentrated areas. The investigations show that negative or positive correlations carry the same weight. The three key variables emerged as the main cause of internal migration in Ghana. These were, Economic factors, Demographic factors, Social and cultural factors, Geographical and physical factors and Political and institutional factors and welfare and poverty as the main cause of internal migration in Ghana. In recommendation, even though, this method has proven to be successful in explaining poverty reduction techniques, other methods could also be applied as alternative to the factor analysis. Internal migration plays an important role in sharpening peoples’ lives, if not properly managed could be harmful to some extent. Factor analysis method is not good for small sample size for the reasons given above. Likelihood maximum ratio test should always be considered in place of the factor analysis. In conclusion, nine variables were initially put into the computer and a test performed that allowed the nine variables to be reduced to three components namely, welfare, economic and poverty as the basic factors responsible for migration in Ghana. For other areas/regions, migration for a better employment produce labour force shortage and affects the potential of local economic and social development. The internal migration phenomenon is influenced by the economic evolution and open new possibilities for further analysis. Money sent by emigrants to their families is increasing their quality of life and has positive effects on the family relations. Keywords: Internal Migration, poverty reduction, Development, factor analysis. 1. Introduction Migration has been generally defined to consists of people whether as individuals or in groups that move across different geographic, administrative or political jurisdictions for temporary or permanent settlements for various reasons (Castles, 2004; Leon-Ledesma and Piracha, 2004; Nagaraja, 2012; Nicholae and Rabu, 2007). Since the movement between two geographical units does not have to occur directly, one can further make a distinction between the place of source or end region, transit regions, and the place of destination or receiving region (International Organization for Migration, IOM, 2012). Three types of migrants are distinguishable namely: those seeking economic opportunity in the destination economy; migrants who aim to accumulate savings or human capital while away in order to have increased economic opportunities upon their return; and migrants who move because of political, ethnic or religious oppression in their home country (IOM, 2012). For the majority of migrants, the main driving force behind the migration decision is the desire to improve their material living conditions or quality of life (Conticini and Hulme, 2007). Usually it is assumed that these migrants plan their movements and invest in information and those aspects of human capital that are necessary for a successful integration into the labour market and society of the receiving regions (Schuerkens, 2005). In Ghana, the movements of people are mostly from both the rural and urban regions to relatively developed cities like Accra, Kumasi, Sekondi-Takoradi and recently, Tamale. Movements across international borders are called international migration, while internal migration, the focus of this study, is the movement within a country. In general, migration decision can be made by individuals, families or an extended family network (Tiemoko, 2004), but in the case of individual migrants, the decision of family migrants is only partly driven by their own social and economic considerations (Awuse and Tandoh-Offin, 2013). Thus, Haug (2008) argues that the opportunities and restrictions of all family members influence the decision to migrate or return. It might not be sufficient, therefore, to examine only individual motivations to understand migration decisions, especially of internal migrants. The purpose of this study, therefore, is to employ factor analysis to determine which poverty reduction variables with implications for rural livelihoods explain internal migration decisions and development in Ghana. 2. Statement of the Problem The phenomenon of low income and rural urban movement has always been interconnected (Skeldon, 2008). International migration is dominant in recent debates on migration (IOM, 2012; Tiemoko, 2004). Meanwhile, internal migration is far more significant in terms of the numbers of people involved and perhaps even the quantum of internal remittances that the people send home and the potential that it offers for poverty reduction, despite its inability to attract