Empirical Literature

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Empirical literature shows a positive correlation between human capital externalities and labor force participation, wages and employment. According to Winters (2012), the share of adults with a college degree is positively correlated with labor force participation such that a 0.10 increase in the share of adults with college degrees increases labor force participation by 0.0201 for women and 0.0129 for men. A 0.10 increase in the share of adult educated population increases the probability of women being employed by 0.0272 and men by 0.0216. For Turkey, Filiztekin (2011) estimates that a 1-year increase in the average regional education level increases wages by 6.5%. He also found that the illiterate benefit by 6% from the increase in the…show more content…
According to Basu et al (2001), literate members of a household choose to share their knowledge with the illiterate members based on their utility and expected changes in consumption composition. The knowledge transferred to the illiterate members increased their productivy hence their income and the whole household was able to enjoy more utility based on the higher level of consumption. The second reason acts a deterent such that if they share their knowledge, there could be a shift in the balance of power in the household which can affect the composition of consumption. Whether or not information is shared depends on the balance of these opposing…show more content…
They defined illiteracy as the inability to read irrespective of the level of schooling. A literate household has at least one individual who can read and the highest level of education was attributed to the member with the maximum education, whether they were the household head or not. Living in a literate household increased log earnings of illiterate women by log .05, which translates into a 65% increase and increased the log earnings of unmarried women by log 0.74, which translates to a doubled income. Participation of illiterate women in the labor force was however lower for women in literate households. Illiterate men living in literate household experience a 15% increase in earnings and the labor force participation of illiterate rural men is also higher while there is no change for illiterate urban
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