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Schooling, Literacy, Numeracy and Labor Market Success

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Author Info

  • Chiswick, Barry R.

    ()
    (George Washington University)

  • Lee, Yew Liang

    ()
    (University of Western Australia)

  • Miller, Paul W.

    (Curtin University)

Abstract

This paper uses data from the 1996 Australian Survey of Aspects of Literacy to examine the effects on labour market outcomes of literacy, numeracy and educational attainment. The survey includes a range of literacy and numeracy variables that are highly inter-correlated. A “general to specific” approach identifies the most relevant literacy and numeracy variables. Including the others adds little explanatory power. Among males and females separately about half of the total effect of education on labour force participation and on unemployment can be attributed to literacy and numeracy (the indirect effect) and about half to the direct effect of education. There is apparently no indirect effect of labour market experience through literacy and numeracy on participation or unemployment. The direct and total effects of experience are the same. The findings suggest that education is a value added process in which skills, including literacy and numeracy, are improved and that these skills enhance labour market outcomes.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 450.

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Length: 57 pages
Date of creation: Mar 2002
Date of revision:
Publication status: published in: Economic Record, 2003, 79 (245), 165-181
Handle: RePEc:iza:izadps:dp450

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Related research

Keywords: Human capital; literacy; earnings screening; numeracy; schooling; Australia;

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References

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  1. Miller, Paul W & Volker, Paul A, 1984. "The Screening Hypothesis: An Application of the Wiles Test," Economic Inquiry, Western Economic Association International, vol. 22(1), pages 121-27, January.
  2. Paul W. Miller & Leanne M. Neo, 2003. "Labour Market Flexibility and Immigrant Adjustment," The Economic Record, The Economic Society of Australia, vol. 79(246), pages 336-356, 09.
  3. Schultz, Theodore W, 1975. "The Value of the Ability to Deal with Disequilibria," Journal of Economic Literature, American Economic Association, vol. 13(3), pages 827-46, September.
  4. Lang, Kevin & Kropp, David, 1986. "Human Capital versus Sorting: The Effects of Compulsory Attendance Laws," The Quarterly Journal of Economics, MIT Press, vol. 101(3), pages 609-24, August.
  5. Chiswick, Barry R. & Hurst, Michael E., 2000. "The Employment, Unemployment and Unemployment Compensation Benefits of Immigrants," IZA Discussion Papers 129, Institute for the Study of Labor (IZA).
  6. Weiss, Andrew, 1983. "A Sorting-cum-Learning Model of Education," Journal of Political Economy, University of Chicago Press, vol. 91(3), pages 420-42, June.
  7. Le, Anh T & Miller, Paul W, 2000. "Australia's Unemployment Problem," The Economic Record, The Economic Society of Australia, vol. 76(232), pages 74-104, March.
  8. Anh T. Le & Paul W. Miller, 1998. "The ABS Survey of Employment and Unemployment Patterns," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 31(3), pages 290-297.
  9. Michael Grossman, 1972. "The Demand for Health: A Theoretical and Empirical Investigation," NBER Books, National Bureau of Economic Research, Inc, number gros72-1, May.
  10. McNabb, Robert & Richardson, Sue, 1989. "Earnings, Education and Experience: Is Australia Different?," Australian Economic Papers, Wiley Blackwell, vol. 28(52), pages 57-75, June.
  11. Joseph G. Altonji, 1992. "The Effects of High School Curriculum on Education and Labor Market Outcomes," NBER Working Papers 4142, National Bureau of Economic Research, Inc.
  12. Preston, Alison, 1997. "Where Are We Now with Human Capital Theory in Australia?," The Economic Record, The Economic Society of Australia, vol. 73(220), pages 51-78, March.
  13. Barry Chiswick, 1999. "Are Immigrants Favorably Self-Selected?," American Economic Review, American Economic Association, vol. 89(2), pages 181-185, May.
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Citations

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Cited by:
  1. Miller, Paul W. & Mulvey, Charles & Martin, Nick, 2004. "A test of the sorting model of education in Australia," Economics of Education Review, Elsevier, vol. 23(5), pages 473-482, October.
  2. Niels-Hugo Blunch & Claus C Pörtner, 2005. "Literacy, Skills and Welfare: Effects of Participation in Adult Literacy Programs," Working Papers UWEC-2005-23-FC, University of Washington, Department of Economics, revised Aug 2009.
  3. Brian A'Hearn & Jörg Baten & Dorothee Crayen, 2006. "Quantifying quantitative literacy: Age heaping and the history of human capital," Economics Working Papers 996, Department of Economics and Business, Universitat Pompeu Fabra.
  4. Patrick Laplagne & Maurice Glover & Anthony Shomos, 2007. "Effects of Health and Education on Labour Force Participation," Staff Working Papers 0704, Productivity Commission, Government of Australia.

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