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Schooling, Literacy, Numeracy and Labor Market Success

  • Chiswick, Barry R.

    ()

    (George Washington University)

  • Lee, Yew Liang

    ()

    (University of Western Australia)

  • Miller, Paul W.

    (Curtin University)

This paper uses data from the 1996 Australian Survey of Aspects of Literacy to examine the effects on labour market outcomes of literacy, numeracy and educational attainment. The survey includes a range of literacy and numeracy variables that are highly inter-correlated. A “general to specific” approach identifies the most relevant literacy and numeracy variables. Including the others adds little explanatory power. Among males and females separately about half of the total effect of education on labour force participation and on unemployment can be attributed to literacy and numeracy (the indirect effect) and about half to the direct effect of education. There is apparently no indirect effect of labour market experience through literacy and numeracy on participation or unemployment. The direct and total effects of experience are the same. The findings suggest that education is a value added process in which skills, including literacy and numeracy, are improved and that these skills enhance labour market outcomes.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 450.

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Length: 57 pages
Date of creation: Mar 2002
Date of revision:
Publication status: published in: Economic Record, 2003, 79 (245), 165-181
Handle: RePEc:iza:izadps:dp450
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  1. Schultz, Theodore W, 1975. "The Value of the Ability to Deal with Disequilibria," Journal of Economic Literature, American Economic Association, vol. 13(3), pages 827-46, September.
  2. Preston, Alison, 1997. "Where Are We Now with Human Capital Theory in Australia?," The Economic Record, The Economic Society of Australia, vol. 73(220), pages 51-78, March.
  3. Joseph G. Altonji, 1995. "The Effects of High School Curriculum on Education and Labor Market Outcomes," Journal of Human Resources, University of Wisconsin Press, vol. 30(3), pages 409-438.
  4. Michael Grossman, 1972. "The Demand for Health: A Theoretical and Empirical Investigation," NBER Books, National Bureau of Economic Research, Inc, number gros72-1, June.
  5. Miller, Paul W & Volker, Paul A, 1984. "The Screening Hypothesis: An Application of the Wiles Test," Economic Inquiry, Western Economic Association International, vol. 22(1), pages 121-27, January.
  6. A.T. Le & P.W. Miller, 2000. "Australia's Unemployment Problem," Economics Discussion / Working Papers 00-03, The University of Western Australia, Department of Economics.
  7. Anh T. Le & Paul W. Miller, 1998. "The ABS Survey of Employment and Unemployment Patterns," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 31(3), pages 290-297.
  8. Hurst, Michael E. & Chiswick, Barry R., 2000. "The Employment, Unemployment and Unemployment Compensation Benefits of Immigrants," IZA Discussion Papers 129, Institute for the Study of Labor (IZA).
  9. Lang, Kevin & Kropp, David, 1986. "Human Capital versus Sorting: The Effects of Compulsory Attendance Laws," The Quarterly Journal of Economics, MIT Press, vol. 101(3), pages 609-24, August.
  10. Paul W. Miller & Leanne M. Neo, 2003. "Labour Market Flexibility and Immigrant Adjustment," The Economic Record, The Economic Society of Australia, vol. 79(246), pages 336-356, 09.
  11. McNabb, Robert & Richardson, Sue, 1989. "Earnings, Education and Experience: Is Australia Different?," Australian Economic Papers, Wiley Blackwell, vol. 28(52), pages 57-75, June.
  12. Weiss, Andrew, 1983. "A Sorting-cum-Learning Model of Education," Journal of Political Economy, University of Chicago Press, vol. 91(3), pages 420-42, June.
  13. Barry Chiswick, 1999. "Are Immigrants Favorably Self-Selected?," American Economic Review, American Economic Association, vol. 89(2), pages 181-185, May.
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