Is Knowledge Shared within Households?

According to theory, 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. But do literate members of the household share the benefits of literacy with other members of the household in practice?

Using household survey data for Bangladesh, Basu, Narayan, and Ravallion find that education has strong external effects on individual earnings.

When a range of personal attributes is held constant, an illiterate adult earns significantly more in the nonfarm economy when living in a household with at least one literate member. That is, a literate person is likely to share some of the benefits of his or her literacy with other members of the household. It is better to be an illiterate in a household where someone is literate than in a household of illiterates only.

It is widely noted that a literate mother confers greater benefits on her children than a literate father does. But what about differences between male and female recipients of knowledge? The empirical results suggest that women are more efficient recipients, too. [author]