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The value of basic skills in the British labour market

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  • 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.

Suggested Citation

  • Anna Vignoles & Augustin De Coulon & Oscar Marcenaro-Gutierrez, 2011. "The value of basic skills in the British labour market," Oxford Economic Papers, Oxford University Press, vol. 63(1), pages 27-48, January.
    • Handle: RePEc:oup:oxecpp:v:63:y:2011:i:1:p:27-48
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    Cited by:

    1. Cain Polidano & Chris Ryan, 2017. "What Happens to Students with Low Reading Proficiency at 15? Evidence from Australia," The Economic Record, The Economic Society of Australia, vol. 93(303), pages 600-614, December.
    2. Isphording, Ingo E., 2014. "Disadvantages of linguistic origin—Evidence from immigrant literacy scores," Economics Letters, Elsevier, vol. 123(2), pages 236-239.
    3. José Manuel Cordero Ferrera & Manuel Muñiz Pérez & Rosa Simancas Rodríguez, 2015. "The influence of socioeconomic factors on cognitive and non-cognitive educational outcomes," Investigaciones de Economía de la Educación volume 10, in: Marta Rahona López & Jennifer Graves (ed.),Investigaciones de Economía de la Educación 10, edition 1, volume 10, chapter 21, pages 413-438, Asociación de Economía de la Educación.
    4. Augustin de Coulon & Elena Meschi & Anna Vignoles, 2011. "Parents' skills and children's cognitive and non-cognitive outcomes," Education Economics, Taylor & Francis Journals, vol. 19(5), pages 451-474, July.
    5. Luis Alejandro Lopez-Agudo & Oscar David Marcenaro Gutierrez & Helena Ferreira-Marques, 2016. "Gender, institutions and educational achievement: a cross country comparison," Investigaciones de Economía de la Educación volume 11, in: José Manuel Cordero Ferrera & Rosa Simancas Rodríguez (ed.),Investigaciones de Economía de la Educación 11, edition 1, volume 11, chapter 20, pages 383-400, Asociación de Economía de la Educación.
    6. Anna Vignoles, 2016. "What is the economic value of literacy and numeracy?," IZA World of Labor, Institute of Labor Economics (IZA), pages 229-229, January.
    7. Ferran Mane & Daniel Miravet, 2016. "Using the job requirements approach and matched employer-employee data to investigate the content of individuals’ human capital
      [Messung von individuellem Humankapital auf Basis des „Jobanforderung      ," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 49(2), pages 133-155, October.
    8. Blázquez, Maite & Herrarte, Ainhoa & Llorente-Heras, Raquel, 2018. "Competencies, occupational status, and earnings among European university graduates," Economics of Education Review, Elsevier, vol. 62(C), pages 16-34.
    9. Andrea Cegolon, 2015. "Determinants and Learning Effects of Adult Education-Training: a Cross-National Comparison Using PIAAC Data," DoQSS Working Papers 15-11, Quantitative Social Science - UCL Social Research Institute, University College London.
    10. Fasih, Tazeen & Patrinos, Harry Anthony & Sakellariou, Chris, 2013. "Functional literacy, heterogeneity and the returns to schooling : multi-country evidence," Policy Research Working Paper Series 6697, The World Bank.
    11. Oliver Himmler & Robert Jäckle, 2018. "Literacy and the Migrant–Native Wage Gap," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 64(3), pages 592-625, September.
    12. O. D. Marcenaro-Gutierrez & M. Luque & L. A. Lopez-Agudo, 2016. "Balancing Teachers’ Math Satisfaction and Other Indicators of the Education System’s Performance," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 129(3), pages 1319-1348, December.
    13. GÓMEZ , Nuria & TOBARRA, María-Ángeles & LÓPEZ, Luis-Antonio, 2014. "Employment Opportunities In Spain: Gender Differences By Education And Ict Usage," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 14(3), pages 105-130.
    14. Antoni, Manfred & Heineck, Guido, 2012. "Do literacy and numeracy pay off? On the relationship between basic skills and earnings," Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century 65404, Verein für Socialpolitik / German Economic Association.
    15. Fadi Fawaz & Eric Frey & Deborah Piscitiello, 2019. "The effects of HIV mortality on saving and investment in Asia," Asian Journal of Empirical Research, Asian Economic and Social Society, vol. 9(1), pages 1-15, January.
    16. Harry Anthony Patrinos & Chris Sakellariou, 2015. "Adult literacy, heterogeneity and returns to schooling in Chile," Education Economics, Taylor & Francis Journals, vol. 23(1), pages 122-136, February.
    17. Nicola Brandt, 2015. "Vocational training and adult learning for better skills in France," OECD Economics Department Working Papers 1260, OECD Publishing.
    18. repec:zbw:rwirep:0397 is not listed on IDEAS
    19. Derek Bosworth & Genna Kik, 2010. "Adult training policy with respect to basic skills: economic and social issues," Investigaciones de Economía de la Educación volume 5, in: María Jesús Mancebón-Torrubia & Domingo P. Ximénez-de-Embún & José María Gómez-Sancho & Gregorio Gim (ed.),Investigaciones de Economía de la Educación 5, edition 1, volume 5, chapter 26, pages 499-524, Asociación de Economía de la Educación.
    20. Kelly, Elish & McGuinness, Seamus & O'Connell, Philip J., 2012. "Literacy, Numeracy and Activation among the Unemployed," Research Series, Economic and Social Research Institute (ESRI), number RS25.
    21. Miguel Ángel Ropero García & Oscar David Marcenaro Gutierrez & Luis Alejandro Lopez-Agudo, 2016. "Gender roles as indicator of academic failure," Investigaciones de Economía de la Educación volume 11, in: José Manuel Cordero Ferrera & Rosa Simancas Rodríguez (ed.),Investigaciones de Economía de la Educación 11, edition 1, volume 11, chapter 11, pages 227-248, Asociación de Economía de la Educación.
    22. Anna Vignoles & Augustin de Coulon, 2008. "An Analysis of the Benefit of NVQ2 Qualifications Acquired at Age 26-34," CEE Discussion Papers 0106, Centre for the Economics of Education, LSE.
    23. Kelly, Elish & McGuinness, Seamus & O'Connell, Philip J., 2012. "Literacy and Numeracy Difficulties in the Irish Workplace: Impact on Earnings and Training Expenditures," Research Series, Economic and Social Research Institute (ESRI), number RS27.
    24. Ingo Isphording, 2013. "Disadvantages of Linguistic Origin – Evidence from Immigrant Literacy Scores," Ruhr Economic Papers 0397, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.

    More about this item

    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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