IS KNOWLEDGE SHARED WITHIN HOUSEHOLDS?
THEORY AND EVIDENCE FOR BANGLADESH

 

Kaushik Basu
Ambar Narayan
Martin Ravallion

Abstract

A member of a collective-action household may or may not share knowledge with others in that household. Shared income gains from shared knowledge 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.

 

JEL classifications: D10, J24, J31.

Working Papers