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Literacy, Numeracy and Labour Market Outcomes in Canada

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Author Info
David A Green & W Craig Riddell

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Abstract

Most research on the contribution of human capital to economic growth and its role in the distribution of income uses indirect measures of human capital such as educational attainment and work experience. Such measures are arguably inputs into the production of human capital in the form of skills, competencies and knowledge. This study uses Canadian data from the international Adult Literacy Survey to analyse the role of directly observed skills -- specifically, prose, document and quantitative literacy -- on individual labour market earnings. The contributions of unobserved skills are taken into account using input measures (education and experience). We find that literacy skills have a large and statistically significant causal effect on earnings. As much as one-third of the return to education may be due to the combined effects of education on literacy and of literacy skills on earnings. In contrast, very little of the return to labour market experience is associated with the combined effects of experience on literacy and literacy skills on earnings.

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Paper provided by McMaster University in its series Canadian International Labour Network Working Papers with number 47.

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Length: 52 pages
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Handle: RePEc:mcm:cilnwp:47

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  1. Baker, Michael & Benjamin, Dwayne, 1994. "The Performance of Immigrants in the Canadian Labor Market," Journal of Labor Economics, University of Chicago Press, vol. 12(3), pages 369-405, July. [Downloadable!] (restricted)
  2. Arrow, Kenneth J., 1973. "Higher education as a filter," Journal of Public Economics, Elsevier, vol. 2(3), pages 193-216, July. [Downloadable!] (restricted)
  3. Rivera-Batiz, Francisco L., 1990. "Literacy skills and the wages of young black and white males in the U.S," Economics Letters, Elsevier, vol. 32(4), pages 377-382, April. [Downloadable!] (restricted)
  4. Richard J. Murnane & John B. Willett & Frank Levy, 1995. "The Growing Importance of Cognitive Skills in Wage Determination," NBER Working Papers 5076, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  5. Card, David, 1999. "The causal effect of education on earnings," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 30, pages 1801-1863 Elsevier. [Downloadable!] (restricted)
  6. Riddell, W.C. & Sweetman, A., 2000. "Human Capital Formation in a Period of Rapid Change," UBC Departmental Archives 00-06, UBC Department of Economics.
  7. David E. Bloom & Gilles Grenier & Morley Gunderson, 1995. "The Changing Labour Market Position of Canadian Immigrants," Canadian Journal of Economics, Canadian Economics Association, vol. 28(4b), pages 987-1005, November.
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  8. Griliches, Zvi, 1977. "Estimating the Returns to Schooling: Some Econometric Problems," Econometrica, Econometric Society, vol. 45(1), pages 1-22, January. [Downloadable!] (restricted)
  9. Mary L. Grant, 1999. "Evidence of New Immigrant Assimilation in Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 32(4), pages 930-955, August. [Downloadable!] (restricted)
  10. Spence, A Michael, 1973. "Job Market Signaling," The Quarterly Journal of Economics, MIT Press, vol. 87(3), pages 355-74, August. [Downloadable!] (restricted)
  11. Boissiere, M & Knight, J B & Sabot, R H, 1985. "Earnings, Schooling, Ability, and Cognitive Skills," American Economic Review, American Economic Association, vol. 75(5), pages 1016-30, December. [Downloadable!] (restricted)
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  1. Gosta Esping-Andersen, 2008. "Childhood investments and skill formation," International Tax and Public Finance, Springer, vol. 15(1), pages 19-44, February. [Downloadable!] (restricted)
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