Functional literacy, educational attainment and earnings - evidence from the international adult literacy survey

Abstract

Abstract:In this paper a rich and innovative dataset, the International Adult Literacy Survey, is used to examine the impact of functional literacy on earnings. The IALS surveys 12 OECD countries and sub-regions via a consistent questionnaire and includes a number of tests of numeracy and literacy, as well as basic labour market information. This paper examines the effect of these skills on labour market earnings for the Republic of Ireland, Northern Ireland, and for Great Britain. The estimates suggest that while ability has a role in determining earnings the dominant factor remains formal education. It is shown that, particularly for Great Britain, there is a positive interaction between the test score and education in determining earnings.

Measuring Well-being and Exclusion in Europe's Regions

“…First, as noted, it does not tell us what people have gained from their education, though there is clearly likely to be a strong relation between staying on in school and literacy and other skills. The final report on the IALS project shows a correlation in every country between educational attainment and literacy proficiency -and of course it would be rather disturbing if this were not the case (OECD, 2000, Figure 2.4; and see also Denny et al, 2000, Table 3 for more detail on the UK and Ireland). But the correlation is far from perfect, which is also not surprising -for one thing, ISCED level does not reflect additional learning such as adult literacy classes taken later in life.…”

New Methods for Comparing Literacy Across Populations: Insights from the Measurement of Poverty

“…Accounting for the difference in levels of literacy across countries and why different indices give a different picture is beyond the scope of this paper. The work by the Organisation for Economic Co-operation andDevelopment (1995, 1997) and Denny et al (1999) shows that, as we expect, higher educational attainment is associated with higher levels of literacy though to an extent that varies by country. We may think of the different types of literacy as 'joint products' of the educational system.…”

“…This is probably a refelection of their higher educational attainment. In other work we have measured the effect on literacy of several factors including educational attainment of individuals and we found that education is quite significant but to an extent which varies across countries (Denny et al, 1999). With respect to gender the picture is less clear: taking account of the severity of the illiteracy .α = 1 or α = 2/ reverses the conclusion that young men have a (slightly) lower degree of illiteracy than young women.…”

“…It is not clear how this method can be extended to our approach. As we use just one of the plausible values this should not be a problem and the bootstrap should provide relatively robust estimates in general; see Efron and Tibshirani (1993). Using any of the other plausible values, such as 'prose2' or 'prose5', gives results that are not noticeably different.…”

“…In other work we have measured the effect of literacy scores on earnings in a subset of countries where it is shown that quantitative literacy (i.e. numeracy) is what matters (Denny et al, 2000) but the possible non-linearity has been extensively explored.…”