Farm productivity and efficiency in rural Bangladesh: the role of education revisited

TLDR

The study reexamines how household education influences rice production in Bangladesh by analyzing data from 141 villages. Using average and stochastic production frontier models with comprehensive education‑stock proxies, the authors estimate internal and external returns to schooling on farm productivity and efficiency. Education increases rice productivity and potential output while reducing inefficiencies, but has no detectable external benefit to neighboring farms, informing rural education policy.

Abstract

This article reassesses the debate over the role of education in farm production in Bangladesh using a large dataset on rice producing households from 141 villages. Average and stochastic production frontier functions are estimated to ascertain the effect of education on productivity and efficiency. A full set of proxies for farm education stock variables are incorporated to investigate the 'internal' as well as 'external' returns to education. The external effect is investigated in the context of rural neighbourhoods. Our analysis reveals that in addition to raising rice productivity and boosting potential output, household education significantly reduces production inefficiencies. However, we are unable to find any evidence of the externality benefit of schooling – neighbour's education does not matter in farm production. We discuss the implication of these findings for rural education programmes in Bangladesh.