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Functional literacy, educational attainment and earnings - evidence from the international adult literacy survey

Author

Listed:
  • Kevin Denny

    (Institute for Fiscal Studies and University College Dublin)

  • Harmon, Harmon

    (Institute for Fiscal Studies)

  • Sandra Redmond

    (Institute for Fiscal Studies)

Abstract

In this paper a rich and innovative dataset, the International Adult Literacy Survey, is used to examine the impact of functional literacy on earnings. The IALS surveys 12 OECD countries and sub-regions via a consistent questionnaire and includes a number of tests of numeracy and literacy, as well as basic labour market information. This paper examines the effect of these skills on labour market earnings for the Republic of Ireland, Northern Ireland, and for Great Britain. The estimates suggest that while ability has a role in determining earnings the dominant factor remains formal education. It is shown that, particularly for Great Britain, there is a positive interaction between the test score and education in determining earnings.

Suggested Citation

  • Kevin Denny & Harmon, Harmon & Sandra Redmond, 2000. "Functional literacy, educational attainment and earnings - evidence from the international adult literacy survey," IFS Working Papers W00/09, Institute for Fiscal Studies.
    • Handle: RePEc:ifs:ifsewp:00/09
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    References listed on IDEAS

    as
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    9. Harmon, Harmon & Ian Walker, 1996. "The marginal and average returns to schooling," IFS Working Papers W96/11, Institute for Fiscal Studies.
    10. Alan B. Krueger & Mikael Lindahl, 1998. "Education for Growth in Sweden and the World," Working Papers 790, Princeton University, Department of Economics, Industrial Relations Section..
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    14. Kevin Denny & Colm Harmon, 1999. "Wages and human capital," Open Access publications 10197/145, School of Economics, University College Dublin.
    15. Amanda Gosling & Stephen Machin & Costas Meghir, 2000. "The Changing Distribution of Male Wages in the U.K," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 67(4), pages 635-666.
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    17. Orley Ashenfelter & Cecilia Rouse, 1998. "Schooling, Intelligence, and Income in America: Cracks in the Bell Curve," Working Papers 786, Princeton University, Department of Economics, Industrial Relations Section..
    18. Harmon, Colm & Walker, Ian, 1999. "The marginal and average returns to schooling in the UK," European Economic Review, Elsevier, vol. 43(4-6), pages 879-887, April.
    19. Kevin Denny & Colm Harmon, 2001. "Testing for sheepskin effects in earnings equations: evidence for five countries," Applied Economics Letters, Taylor & Francis Journals, vol. 8(9), pages 635-637.
    20. Alan Barrett & Tim Callan & Brian Nolan, 1999. "Rising Wage Inequality, Returns to Education and Labour Market Institutions: Evidence from Ireland," British Journal of Industrial Relations, London School of Economics, vol. 37(1), pages 77-100, March.
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    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Lane, Philip & McCoy, Selina & Smith, Stephen & Smyth, Emer & Van Soest, Arthur & Walsh, John R., 2003. "Budget Perspectives 2004," Research Series, Economic and Social Research Institute (ESRI), number BMI172 edited by Callan, Tim & Doris, Aedin & McCoy, Daniel.
    2. Fahey, Tony & Russell, Helen & FitzGerald, John, 2006. "Childcare," Book Chapters, in: Morgenroth, Edgar (ed.),Ex-Ante Evaluation of the Investment Priorities for the National Development Plan 2007-2013, Economic and Social Research Institute (ESRI).
    3. Kristof De Witte & Wim Groot & Henri?tte Maassen van den Brink, 2012. "The Efficiency of Education in Generating Literacy: A Stochastic Frontier Approach," Review of Economics & Finance, Better Advances Press, Canada, vol. 2, pages 25-37, February.
    4. Morgenroth, Edgar & FitzGerald, John & FitzGerald, John, 2006. "Summary and Conclusions," Book Chapters, in: Morgenroth, Edgar (ed.),Ex-Ante Evaluation of the Investment Priorities for the National Development Plan 2007-2013, chapter 24, pages 317-333, Economic and Social Research Institute (ESRI).
      • Baker, Terence J. & FitzGerald, John & Honohan, Patrick & FitzGerald, John & Honohan, Patrick, 1996. "Summary and Conclusions," Book Chapters, in: Baker, Terence J. (ed.),Economic Implications for Ireland of EMU, chapter 12, pages 339-352, Economic and Social Research Institute (ESRI).
    5. Kitty Stewart, 2002. "Measuring Well-Being and Exclusion in Europes Regions," CASE Papers case53, Centre for Analysis of Social Exclusion, LSE.
    6. Kevin Denny & Colm Harmon, 2001. "Testing for sheepskin effects in earnings equations: evidence for five countries," Applied Economics Letters, Taylor & Francis Journals, vol. 8(9), pages 635-637.
    7. Hanushek, Eric A. & Woessmann, Ludger, 2011. "The Economics of International Differences in Educational Achievement," Handbook of the Economics of Education, in: Erik Hanushek & Stephen Machin & Ludger Woessmann (ed.), Handbook of the Economics of Education, edition 1, volume 3, chapter 2, pages 89-200, Elsevier.
    8. Kitty Stewart, 2002. "Measuring Well-Being and Exclusion in Europe's Regions," CASE Papers 053, Centre for Analysis of Social Exclusion, LSE.
    9. Rocha, Maúna Soares de Baldini & Ponczek, Vladimir Pinheiro, 2010. "Impacto da alfabetização de adultos sobre salário e emprego," Textos para discussão 215, FGV EESP - Escola de Economia de São Paulo, Fundação Getulio Vargas (Brazil).
    10. repec:esr:chaptr:jacb200312 is not listed on IDEAS
    11. Kitty Stewart, 2002. "Measuring Well-Being and Exclusion in Europe s Regions," LIS Working papers 303, LIS Cross-National Data Center in Luxembourg.
    12. O'Connell, Philip J. & Russell, Helen & FitzGerald, John, 2006. "Human Resources," Book Chapters, in: Morgenroth, Edgar (ed.),Ex-Ante Evaluation of the Investment Priorities for the National Development Plan 2007-2013, Economic and Social Research Institute (ESRI).
    13. Morgenroth, Edgar & FitzGerald, John & FitzGerald, John, 2006. "Productive Sector," Book Chapters, in: Morgenroth, Edgar (ed.),Ex-Ante Evaluation of the Investment Priorities for the National Development Plan 2007-2013, chapter 20, pages 257-277, Economic and Social Research Institute (ESRI).
    14. Denny, Kevin & Harmon, Colm, 2000. "Education Policy Reform and the Return to Schooling from Instrumental Variables," CEPR Discussion Papers 2518, C.E.P.R. Discussion Papers.
    15. Fahey, Tony & Scott, Susan & FitzGerald, John, 2006. "Sports and Arts," Book Chapters, in: Morgenroth, Edgar (ed.),Ex-Ante Evaluation of the Investment Priorities for the National Development Plan 2007-2013, Economic and Social Research Institute (ESRI).
    16. McCoy, Selina & Smyth, Emer, 2003. "Educational Expenditure: Implications for Equality," Papers BP2004/4, Economic and Social Research Institute (ESRI).
    17. Morgenroth, Edgar & FitzGerald, John (ed.), 2006. "Ex-ante Evaluation of the Investment Priorities for the National Development Plan 2007-2013," Research Series, Economic and Social Research Institute (ESRI), number PRS59.
    18. Tate, Robert & Finlayson, Greg & MacWilliam, Leonard & Wiley, Miriam M. & Morgenroth, Edgar & FitzGerald, John, 2006. "Health," Book Chapters, in: Morgenroth, Edgar (ed.),Ex-Ante Evaluation of the Investment Priorities for the National Development Plan 2007-2013, Economic and Social Research Institute (ESRI).
    19. Kevin Denny, 2002. "New methods for comparing literacy across populations: insights from the measurement of poverty," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 165(3), pages 481-493, October.

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