Literacy, Skills and Welfare

Niels-Hugo Blunch and I have revised our paper "Literacy, Skills and Welfare: Effects of Participation in Adult Literacy Programs" for resubmission to Economic Development and Cultural Change. The abstract is below.

This paper examines the effects of adult literacy program participation on household consumption in Ghana. We use community fixed effects combined with instrumental variables to account for possible endogenous program placement and self-selection into program participation. For households where none of the adults have completed any formal education we find a substantial, positive and statistically significant effect on household consumption. Our preferred estimate of the effect of participation for households without education is equivalent to a ten percent increase in consumption per adult equivalent. There is, however, little evidence that other households benefit from participation in terms of welfare. The improvements in literacy and numeracy rates are also mainly concentrated among participants with little or no formal schooling, although most participants appear to gain in skills to some extent. Taking account of both direct cost and opportunity cost we argue that the social returns to adult literacy programs are substantial.