Literacy Choice with Externality: Some Evidences from India

Abstract

Numerous studies exist on the impact of education on the several socio economic choices made by the individual as well as the families. It is generally argued that the improvement in literacy raises the income prospect of the individuals. It raises the health awareness and has a positive impact on the life expectancy and the reduction of morbidity and mortality. Instances are many. However there is a reverse causation. The actual educational attainment of a family (including the literacy rate) should itself depend on the other socio economic features of the family. This paper tries to discuss the causation with respect to the literacy rate. For this we take a new view of literacy as postulated by Basu and Foster (1998). Literacy improves the welfare not only the literate but also those who are close proximity with him or her. Using the NSSO 64th round data we try to find out the impact of various socio economic variables as the family literacy rate. The analysis find supportive evidence that the level of family literacy is directly related with family assets, income and other economic variables. Education level of household head is also a major stimulating factor. In all, it is the poor families who have low family literacy rate and even isolated illiterates. Economic empowerment is the key to bias the family decision in favour of more of its member literates.