Is Literacy Shared within Households? Theory and Evidence from Bangladesh

31 Pages Posted: 15 Dec 2001

See all articles by Kaushik Basu

Kaushik Basu

Cornell University - Department of Economics; IZA Institute of Labor Economics; Brookings Institution

Ambar Narayan

World Bank, Poverty Global Practice

Martin Ravallion

Georgetown University

Date Written: October 2001


A member of a collective-action household may or may not share the benefits of literacy with others in that household; the shared gains from doing so may well be offset by a shift in the balance of power within the family. Using household survey data for Bangladesh we find strong external effects of education on individual earnings. Holding a range of personal attributes constant, an illiterate adult earns significantly more in the non-farm economy when living in a family with at least one literate member. These effects are strongest, and most robust, for women. Omitted-variable bias cannot be ruled out, but would also be consistent with an intra-household externality of literacy.

Keywords: Household behavior, literacy, externalities, earnings, Bangladesh

JEL Classification: D10, J24, J31

Suggested Citation

Basu, Kaushik and Narayan, Ambar and Ravallion, Martin, Is Literacy Shared within Households? Theory and Evidence from Bangladesh (October 2001). MIT Department of Economics Working Paper No. 01-44. Available at SSRN: or

Kaushik Basu (Contact Author)

Cornell University - Department of Economics ( email )

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IZA Institute of Labor Economics

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Brookings Institution ( email )

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Ambar Narayan

World Bank, Poverty Global Practice ( email )

1818 H Street, NW
Washington, DC 20433
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Martin Ravallion

Georgetown University ( email )

Washington, DC 20057
United States

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