The Impact of Family Literacy on the Earnings of Illiterates : Evidence from Senegal

This paper investigates the extent to which the sharing of literacy knowledge within the household affects the labor force participation and the earnings of illiterate workers in Senegal. Controlling for selection bias, selective sorting, endogeneity and measurement error in the literacy variables, I find evidence that parental literacy and education do not capture all sources of external literacy benefits and that illiterate members also benefit from other literate members of the household. It also appears that rural workers and male illiterates tend to participate more in the labor market than their urban and female counterparts. The earnings of an illiterate female worker (or an urban worker) are, on average, 44% (or 37%) higher than the ones of another illiterate female (urban) worker whose family's ratio of literate to illiterate members is one point lower. This suggests that policies targeting isolated illiterate households, in both rural and urban zones, as well as illiterate women - who appear to be better recipients and generators of external literacy benefits within households - are likely to mitigate their vulnerability and, thus, to reduce the incidence of illiteracy and poverty in Senegal