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Literacy and labour market outcomes: self-assessment versus test score measures

  • Ross Finnie
  • Ronald Meng

This paper looks at the determinants of literacy and the relation between literacy and labour market outcomes while focusing on comparisons of self-assessment versus test score measures of literacy. The test score measure performs considerably better than the self-assessments when literacy is treated as an outcome variable in terms of the overall fit of the model and the specific coefficient estimates, with the self-assessments sometimes actually generating wrongly signed parameters. The test score measure also performs much better as an explanatory variable in the employment models, with the self-assessment variable generating significant underestimates of the effects of literacy on the probability of being employed. Finally, the test score is also superior in the income models, although the self-assessment measure is at least a reasonably good performer in this regard, suggesting that the main results reported in much of the existing literature (based on such measures) should perhaps be taken as good representations of the true underlying relationships.

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Article provided by Taylor & Francis Journals in its journal Applied Economics.

Volume (Year): 37 (2005)
Issue (Month): 17 ()
Pages: 1935-1951

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Handle: RePEc:taf:applec:v:37:y:2005:i:17:p:1935-1951
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  1. Charles M. Beach & Ross E. Finnie, 1988. "Family Background in an Extended Earnings-Generation Model: Further Evidence," Eastern Economic Journal, Eastern Economic Association, vol. 14(1), pages 39-49, Jan-Mar.
  2. Chiswick, Barry R, 1991. "Speaking, Reading, and Earnings among Low-Skilled Immigrants," Journal of Labor Economics, University of Chicago Press, vol. 9(2), pages 149-70, April.
  3. George J. Borjas, 1994. "The Economics of Immigration," Journal of Economic Literature, American Economic Association, vol. 32(4), pages 1667-1717, December.
  4. Chiswick, Barry R & Miller, Paul W, 1995. "The Endogeneity between Language and Earnings: International Analyses," Journal of Labor Economics, University of Chicago Press, vol. 13(2), pages 246-88, April.
  5. Rivera-Batiz, Francisco L., 1990. "English language proficiency and the economic progress of immigrants," Economics Letters, Elsevier, vol. 34(3), pages 295-300, November.
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