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The value of basic skills in the British labour market

Author Info

Listed author(s):
  • Anna Vignoles
  • Augustin De Coulon
  • Oscar Marcenaro-Gutierrez

Abstract

We evaluate the labour market value of literacy and numeracy in the UK, focusing on the impact of basic skills on wages. We draw on literacy and numeracy tests undertaken by all members of the UK 1970 British Cohort Study, and on earlier test score information collected during childhood. The data used are rich and allow us to account for potential ability bias. We find literacy and numeracy skills are positively associated with earnings, over and above any general effect on earnings from a person being more cognitively able and indeed over and above the effect of education on earnings. We also assess whether the wage return to skills has increased over time, using a cross cohort analysis. Literacy and numeracy skills have retained their high value in the UK labour market over the period 1995--2004, despite numerous policy attempts to increase the supply of skills during this period. Copyright 2011 Oxford University Press 2010 All rights reserved, Oxford University Press.

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File URL: http://hdl.handle.net/10.1093/oep/gpq012
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Article provided by Oxford University Press in its journal Oxford Economic Papers.

Volume (Year): 63 (2011)
Issue (Month): 1 (January)
Pages: 27-48

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Handle: RePEc:oup:oxecpp:v:63:y:2011:i:1:p:27-48
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Find related papers by JEL classification:
  • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
  • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General

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  1. McIntosh, Steven & Vignoles, Anna, 2001. "Measuring and Assessing the Impact of Basic Skills on Labour Market Outcomes," Oxford Economic Papers, Oxford University Press, vol. 53(3), pages 453-481, July.
  2. Angrist, Joshua D. & Krueger, Alan B., 1999. "Empirical strategies in labor economics," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 23, pages 1277-1366 Elsevier.
  3. F Green & Steven McIntosh & Anna Vignoles, 1999. "Overeducation and Skills - Clarifying the Concepts," CEP Discussion Papers dp0435, Centre for Economic Performance, LSE.
  4. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters,in: Schooling, Experience, and Earnings, pages 1-4 National Bureau of Economic Research, Inc.
  5. Dearden, Lorraine, et al, 2002. "The Returns to Academic and Vocational Qualifications in Britain," Bulletin of Economic Research, Wiley Blackwell, vol. 54(3), pages 249-274, July.
  6. Colm Harmon & Kevin Denny & Vincent O'Sullivan, 2003. "Education, earnings and skills : a multi-country comparison," Open Access publications 10197/649, School of Economics, University College Dublin.
  7. Angrist, J D & Imbens, G W & Krueger, A B, 1999. "Jackknife Instrumental Variables Estimation," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 14(1), pages 57-67, Jan.-Feb..
  8. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1, Enero-Jun.
  9. Griliches, Zvi, 1977. "Estimating the Returns to Schooling: Some Econometric Problems," Econometrica, Econometric Society, vol. 45(1), pages 1-22, January.
  10. Lorraine Dearden, 1998. "Ability, families, education and earnings in Britain," IFS Working Papers W98/14, Institute for Fiscal Studies.
  11. Behrman, Jere R & Rosenzweig, Mark R & Taubman, Paul, 1994. "Endowments and the Allocation of Schooling in the Family and in the Marriage Market: The Twins Experiment," Journal of Political Economy, University of Chicago Press, vol. 102(6), pages 1131-1174, December.
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