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). Available at SSRN: or

Kaushik Basu (Contact Author)

Cornell University - Department of Economics ( email )

414 Uris Hall
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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
United States

Martin Ravallion

Georgetown University ( email )

Washington, DC 20057
United States

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