December 1999 : Yes - and more efficiently by women than by men, according to this analysis of household survey data for Bangladesh. An illiterate adult earns significantly more in the nonfarm economy when living in a household with at least one literate member. 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. This paper - a joint product of the Office of the Senior Vice President and Chief Economist, Development Economics, and Poverty and Human Resources, Development Research Group - is part of a larger effort in the Bank to understand the relationship between literacy and balance of power in the household. This paper was funded by the Bank's Research Support Budget under the research project Intrahousehold Decisionmaking, Literacy, and Child Labor (RPO 683-07). The authors may be contacted at kb40@cornell.edu, anarayan@worldbank.org, or mravallion@worldbank.org.