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Adult literacy and economic growth - WP 04/24

Appendix 1 – Studies of literacy, earnings and employment

Study Country Dataset Sample Type of model Dependent variable (log for earnings) Measure of literacy Controls for Results for men (women)
Study Country Dataset Sample Type of model Dependent variable (log for earnings) Measure of literacy Controls for Results for men (women)
EARNINGS
Studies using IALS data

Maré and Chapple (2000)

Tables 7 and 8

New Zealand IALS workers OLS annual earnings average literacy score (log) demographics, education 10% increase in score raises earnings by 4.0% (5.1%)
aa, plus quantity of time worked in the previous year 10% increase in score raises earnings by 5.0% (3.2%)

Blau and Kahn (2001)

Table 2

multi-country IALS full-time workers OLS weekly earnings average literacy score age

1 s.d. increase in score raises earnings by:

13.8% (25.3%) in Canada

19.7% (15.8%) in the Netherlands

10.0% (7.7%) in Sweden

11.1% (11.8%) in Switzerland

24.2% (22.1%) in the United States

aa, plus education

1 s.d. increase in score raises earnings by:

9.3% (16.7%) in Canada

16.3% (12.5%) in the Netherlands

7.6% (3.3%) in Sweden

8.1% (9.3%) in Switzerland

16.4% (11.9%) in the United States

Boothby (2002)

Table 5

Canada IALS full-time workers born in Canada OLS annual earnings average literacy score demographics, education 10 point increase in score raises earnings by 3% (4%)

Green and Riddell (2003)

Table 3

Canada IALS full-year, full-time, male workers quantile regression annual earnings average literacy score experience, education, parents’ education

at the median a 10 point increase in score raises earnings by 5.7%

results were very similar at the 10th, 25th, 75th and 90th percentiles

Denny et al (2004)

Table 2

multi-country IALS workers OLS hourly earnings average literacy score sex, age, immigrant status, urban/rural, education

Results are for men and women combined.

10 point [1 s.d.] increase in score raises earnings by:

1.9% [9.6%] in Belgium

1.4%* [8.2%*] in Canada (English)

1.8%* [9.6%*] in Canada (French)

2.7% [11.7%] in the Czech Republic

2.0% [7.4%] in Denmark

2.1% [8.2%] in Finland

1.3% [5.3%] in Germany

2.6% [13.7%] in Great Britain

1.9% [7.9%] in Hungary

3.2% [16.8%] in Ireland

2.0% [10.8%] in Italy

3.3% [12.9%] in the Netherlands

2.4% [11.8%] in New Zealand

2.6% [14.5%] in Northern Ireland

1.7% [6.7%] in Norway

1.8% [8.1%] in Sweden

2.1% [8.9%] in Switzerland (French)

2.9% [14.6%] in Switzerland (German)

3.0% [17.6%] in the United States

Lee and Miller (2000)

Table D1

Australia IALS not stated OLS annual earnings level on the document literacy scale (included as a dummy variable) demographics, education, immigration status, disability, self-perception of maths skills

increase in earnings compared to having Level 1 literacy skills:

11.1%* (2.7%*) for being at Level 2

14.5% (13.7%*) for being at Level 3

15.6%* (4.8%*) for being at Level 4

13.2%* (19.3%*) for being at Level 5

McIntosh and Vignoles (2001)

Table A3

United Kingdom IALS workers not in full-time education and not self-employed OLS annual earnings prose literacy level (included as a dummy variable) demographics, parents’ education, part-time status, weeks worked

increase in earnings compared to having Level 1 literacy skills:

18.1% (16.9%*) for being at Level 2

19.0% (30.0%) for being at Levels 3-5

prose literacy level aa, plus education

increase in earnings compared to having Level 1 literacy skills:

11.5%* (14.0%*) for being at Level 2

9.5%* (19.2%) for being at Levels 3-5

quantitative literacy level (included as a dummy variable) demographics, parents’ education, part-time status, weeks worked

increase in earnings compared to having Level 1-2 numeracy skills:

10.3%* (10.6%*) for being at Level 3

24.8% (32.3%) for being at Levels 4-5

quantitative literacy level aa, plus education

increase in earnings compared to having Level 1-2 numeracy skills:

7.2%* (4.3%*) for being at Level 3

13.2%* (17.5%) for being at Levels 4-5

Studies using other cross-sectional data

Ishikawa and Ryan (2002)

Table 6

United States NALS not stated OLS weekly wages prose literacy score demographics, disability, occupation, industry, family income, parents’ education

10 point increase in score raises wages by:

4.1% (5.4%) for Whites

4.0% (0.5%) for Blacks

10.0% (3.0%) for Hispanics

annual earnings aa aa

10 point increase in score raises wages by:

-0.3% (5.3%) for Whites

-2.6% (-4.6%) for Blacks

3.7% (-3.9%) for Hispanics

Pryor and Schaffer (1999)

Table 5.3

United States NALS full-time workers, age 25-49 OLS weekly wages average literacy score demographics, education, occupation, industry

10 point increase in score raises earnings by 1.7% (2.1%)

1 s.d. increase in score raises earnings by 9.0% (10.0%)

Sum (1999)

Appendix 7B tables

United States NALS full-time workers OLS weekly earnings prose literacy score demographics, enrolled at school, education, disability, marital status, immigration status, self-reported proficiency in English 10 point increase in score raises earnings by 1.9% (2.1%)
annual earnings aa aa 10 point increase in score raises earnings by 2.2% (2.5%)

Raudenbush and Kasim (1998)

Table 4

United States NALS people working, or wishing to work, full-time, aged 25-59 OLS average weekly wages over past year average literacy score gender, ethnicity, work experience, parents’ education

10 point increase in score raises earnings by 2.7%

1 s.d. increase in score raises earnings by 17.7%

[men and women combined]

Charette and Meng (1998)

Tables 5 and 6

Canada

LSUDA

1989

native-born Canadians, employed at some time in the prev 12 months, age 25-69 selection-corrected regression annual income literacy and numeracy test scores (both 0-500 scale) demographics, disability, first language, education

10 point increase in score raises income by

2.9% (3.9%) in the case of literacy

0.7%* (4.2%) in the case of numeracy

[literacy and numeracy included in the model at the same time]

literacy test score aa 10 point increase in literacy score raises income by 3.2% (4.4%)
numeracy test score aa 10 point increase in numeracy score raises income by 2.1% (5.4%)
native-born Canadians, age 25-69, who were in the labour force in the last 12 months OLS weeks worked in the last 12 months literacy and numeracy test scores aa

10 point increase in score increases weeks worked by

0.3 (0.3) weeks in the case of literacy

0.2 (0.3*) weeks in the case of numeracy

[literacy and numeracy included in the model at the same time]

Finnie and Meng (2001)

Table 3

Canada LSUDA 1989 employed at some time in the prev 12 months, age 16-24 selection-corrected regression annual income literacy and numeracy test scores marital status, immigration status, first language, disability, education

10 point increase in score raises income by

-0.9%* (6.2%) in the case of literacy

7.3% (3.3%*) in the case of numeracy

[literacy and numeracy included in the model at the same time]

people not in school, age 16-24 selection-corrected regression weeks worked in past 12 months literacy and numeracy test scores marital status, immigration status, first language, disability, education

10 point increase in score increases weeks worked by

0.4 (0.4) weeks in the case of literacy

-0.1* (0.6) weeks in the case of numeracy

[literacy and numeracy included in the model at the same time]

Rivera-Batiz (1990)

Table 2

United States YALS 1985 workers aged 21-25 selection-corrected regression hourly wages literacy test score (0 to 500 scale) work experience, education, vocational training, region, industry

10 point increase in score raises earnings by:

6.9% for Blacks

6.1%* for Whites

[men and women combined]

Studies using longitudinal data

McIntosh and Vignoles (2001)

Table A3

United Kingdom NCDS workers not in full-time education and not self-employed, age 37 OLS hourly earnings (recorded at age 33) literacy level at age 37 (included as a dummy variable) demographics, family background (parents’ education, social class and financial difficulties), age 7 reading test

increase in earnings compared to having low literacy skills, males and females together:

7.1%* for having medium literacy skills

16.3% for having high literacy skills

literacy level at age 37 aa, plus age 16 reading test, education level

increase in earnings compared to having low literacy skills, males and females together:

1.3%* for having medium literacy skills

8.0%* for having high literacy skills

numeracy level at age 37 (included as a dummy variable) demographics, family background (parents’ education, social class and financial difficulties), age 7 reading test

increase in earnings compared to having low numeracy skills, males and females together:

8.9% for having medium numeracy skills

18.0% for having high numeracy skills

numeracy level at age 37 aa, plus age 16 mathematics test, education level

increase in earnings compared to having low numeracy skills, males and females together:

5.7%* for having medium numeracy skills

7.6%* for having high numeracy skills

Murnane et al (1995)

Tables 3 and 4

United States

NLS72

HS&B

workers

NLS sample in 1978, aged 24

HS&B sample in 1986, aged 24

OLS hourly wages score on test of basic maths skills, given at age 18 demographics, parents’ education, no. of siblings, single parent household, education, work experience, part-time status

1 s.d. increase in score raises earnings by:

2.8% (6.3%) in the NLS72

7.9% (11.0%) in the HS&B

score on test of basic reading skills, given at age 18 aa pattern of results similar to maths test results above, but quantitative impacts on wages are smaller (no figures given)

Murnane, Willett, Duhaldeborde and Tyler (2000)

Tables 5 and 6

United States

NLS72

HS&B

workers with a high school dipl.

NLS sample in 1985, aged 31

HS&B sample in 1991, aged 27

OLS annual earnings score on test of basic maths skills, given at age 18 ethnicity, work experience, family background (incl. parents’ education, no. of siblings, region)

1 s.d. increase in score raises earnings by:

14.6% (9.4%) in the NLS72

11.1% (11.9%) in the HS&B

aa, plus post-school education

1 s.d. increase in score raises earnings by:

9.5% (1.4%) in the NLS72

6.7% (6.3%) in the HS&B

Dougherty (2003)

Table 1

United States NLSY people working at least 30 hours a week OLS hourly earnings, measured in 1988, 1992 and 1996 score on tests of literacy and numeracy, given in 1980 when aged 15-23 ethnicity, work experience, parents’ education, where living at 14, region and SES of current residence, unionisation, score on speeded tests (interpreted as a measure of ability)

1 s.d. increase in score raises earnings by:

9.5% in the case of numeracy

1.4%* in the case of literacy

[both literacy and numeracy were included in the model at the same time]

aa, plus education (years of high school, years of college and interaction terms with num and lit)

1 s.d. increase in score raises earnings by:

2.8% in the case of numeracy

1.9% in the case of literacy

[literacy and numeracy included in the model at the same time]

EMPLOYMENT
Studies using IALS data

Maré and Chapple (2000)

Table 12

New Zealand IALS whole sample logit prob. of being employed average literacy score demographics, education, parents’ education, disability, first language not English 10% increase in score raises prob. of employment by 1.2 p.p. (2.2 p.p.)

McIntosh and Vignoles (2001)

Table A6

United Kingdom IALS not in full-time education probit prob. of being employed prose literacy level (included as a dummy variable) demographics, parents’ education, part-time status, weeks worked

increase in prob. of employment compared to having Level 1 literacy skills:

11.3 p.p. (16.8 p.p.) for being at Level 2

20.4 p.p. (14.9 p.p.) for being at Levels 3-5

prose literacy level aa, plus education

increase in prob. of employment compared to having Level 1 literacy skills:

9.0 p.p. (13.5 p.p.) for being at Level 2

16.2 p.p. (8.5 p.p.*) for being at Levels 3-5

quantitative literacy level (included as a dummy variable) demographics, parents’ education, part-time status, weeks worked

increase in prob. of employment compared to having Level 1-2 numeracy skills:

-4.0 p.p.* (11.3 p.p.) for being at Level 3

6.3 p.p.* (16.4 p.p.) for being at Levels 4-5

quantitative literacy level aa, plus education

increase in prob. of employment compared to having Level 1-2 numeracy skills:

-4.6 p.p.* (9.0 p.p.) for being at Level 3

3.3 p.p.* (12.3 p.p.) for being at Levels 4-5

Lee and Miller (2000)

Table 11

Australia IALS whole sample logit prob. of being in the labour force level on the document literacy scale (included as a dummy variable) demographics, education, immigration status, disability, self-perception of maths skills In general, the higher the literacy level the higher the labour force participation rate, for both men and women. No interpretation of logit coefficients is given.
people in the labour force logit prob. of being unemployed level on the document literacy scale aa In general, the higher the literacy level the lower the unemployment rate, for both men and women. No interpretation of logit coefficients is given.
Studies using other cross-sectional data

Pryor and Schaffer (1999)

Table 2.4

United States NALS people aged 25-49 logit prob. of being employed average literacy score demographics, education, immigration status 1 s.d. increase in score raises prob. of being employed by 3.5 p.p. (7.2 p.p.)

Sum (1999)

Appendix 7B tables

United States NALS whole sample logit prob. of being in the labour force prose literacy score demographics, enrolled at school, disability, marital status, immigration status, self-rep proficiency in English 10 point increase in score raises prob. of being in the labour force by 0.8 p.p. (men and women together)
aa, plus education 10 point increase in score raises prob. of being in the labour force by 0.5 p.p.
prob. of being employed prose literacy score demographics, enrolled at school, disability, marital status, immigration status, self-rep proficiency in English

10 point increase in score raises prob. of

being employed full-time by 1.0 p.p.

being employed full-time, for all the previous year, by 1.0 p.p.

aa, plus education

10 point increase in score raises prob. of

being employed by 0.7 p.p.

being employed full-time by 0.4 p.p.

being employed full-time, for all the previous year, by 0.5 p.p.

respondents in the labour force logit prob. of being unemployed prose literacy score demographics, enrolled at school, disability, marital status, immigration status, self-rep proficiency in English 10 point increase in score raises prob. of being unemployed by -0.6p.p.
aa, plus education 10 point increase in score raises prob. of being unemployed by -0.4 p.p.

Raudenbush and Kasim (1998)

Table 4

United States NALS people working, or wishing to work, full-time, aged 25-59 logit prob. of being unemployed average literacy score gender, ethnicity, work experience, parents’ education 1 s.d. increase in score reduces odds of being unemployed by 26.4%

Charette and Meng (1998)

Table 3

Canada LSUDA 1989 native-born Canadians, age 25-69 probit prob. of being in labour force in last 12 months literacy and numeracy test scores (both 0-500 scale) demographics, disability, first language, education

1 s.d. increase in score raises prob. of being in the labour force by

-0.4 p.p.* (0.3 p.p.*) in the case of literacy

1.5 p.p. (6.8 p.p.) in the case of numeracy

[literacy and numeracy included in the model at the same time]

probit prob. of being employed in last 12 months literacy and numeracy test scores aa

1 s.d. increase in score raises prob. of being employed by

0.5 p.p.* (0.9 p.p.*) in the case of literacy

1.9 p.p. (6.8 p.p.) in the case of numeracy

[literacy and numeracy included in the model at the same time]

probit prob. of being employed full-time in last 12 months literacy and numeracy test scores aa

1 s.d. increase in score raises prob. of being employed full time by

3.8 p.p. (1.4 p.p.*) in the case of literacy

1.7 p.p. (5.4 p.p.) in the case of numeracy

[literacy and numeracy included in the model at the same time]

probit prob. of being unemployed in last 12 months literacy and numeracy test scores aa

1 s.d. increase in score raises prob. of being unemployed by

-2.2 p.p. (-0.2 p.p.*) in the case of literacy

-0.8 p.p.* (-0.01 p.p.*) in the case of numeracy

[literacy and numeracy included in the model at the same time]

Finnie and Meng (2001)

Table 2

Canada LSUDA 1989 people not in school, age 16-24 probit with sample selection prob. of being employed literacy and numeracy test scores marital status, immigration status, disability, education

1 s.d. increase in literacy score raises prob. of employment by 4.5 p.p. for men (not sig. and not given for women)

1 s.d. increase in numeracy score raises prob. of employment by 4.2 p.p. for women (not sig. and not given for men)

[literacy and numeracy included in the model at the same time]

prob. of having been unemployed in last 12 months literacy and numeracy test scores marital status, immigration status, disability, education

1 s.d. increase in literacy score raises prob. of unemployment by -4.4 p.p. for men (not sig. and not given for women)

1 s.d. increase in numeracy score raises prob. of unemployment by -5.8 p.p. for women (not sig. and not given for men)

[literacy and numeracy included in the model at the same time]

Rivera-Batiz (1992)

Table 2 and footnotes

United States YALS 1985 non-students aged 21-25 probit prob. of being employed full time literacy and numeracy test scores (0 to 500 scale) education, ethnicity, marital status, region, vocational training

1 s.d. increase in score raises prob. of being employed full time by 2.2 p.p. (8.2 p.p.) in the case of numeracy

Corresponding literacy figures were not given but probit coefficients were positive and, at least for women, were significant

[literacy and numeracy included in the model at the same time]

Studies using longitudinal data

McIntosh and Vignoles (2001)

Table A5

UK NCDS not in full-time education, age 37 probit prob. of being employed literacy level at age 37 (included as a dummy variable) demographics, family background (parents’ education, social class and financial difficulties), age 7 reading test

increase in prob. of employment compared to having low literacy skills

5.9 p.p. (0.9 p.p.*) for having medium literacy skills

7.5 p.p. (2.9 p.p.*) for having high literacy skills

literacy level at age 37 aa, plus age 16 reading test, education level

increase in prob. of employment compared to having low literacy skills

3.9 p.p. (-3.7 p.p.*) for having medium literacy skills

4.6 p.p.* (-3.0 p.p.*) for having high literacy skills

numeracy level at age 37 (included as a dummy variable) demographics, family background (parents’ education, social class and financial difficulties), age 7 reading test

increase in prob. of employment compared to having low numeracy skills

4.2 p.p. (4.4 p.p.*) for having medium numeracy skills

6.4 p.p. (7.8 p.p.*) for having high numeracy skills

numeracy level at age 37 aa, plus age 16 mathematics test, education level

increase in prob. of employment compared to having low numeracy skills

2.7 p.p.* (2.0 p.p.*) for having medium numeracy skills

4.2 p.p. (1.8 p.p.*) for having high numeracy skills

Caspi et al (1998)

Table 1

New Zealand DMHDS whole sample tobit prob. and duration of unemployment between 15 and 21 score on the Burt Word Reading test, measured at age 15 gender, school qualifications, school involvement, family background, delinquency, mental and physical health, all measured at age 15 adolescents with low reading scores had a 12.1 p.p. greater probability of being unemployed and, when unemployed, averaged 1.7 more months of unemployment

* not statistically significant at 5% level

significance not given

Descriptions of the studies

National Adult Literacy Survey (NALS) was conducted in the United States in 1992. NALS is the forerunner to IALS: it was designed by the same organisation that designed IALS and has prose, document and quantitative scales ranging between 0 and 500. A nationally representative sample of nearly 13,600 individuals were interviewed in their homes and a sample of over 1,000 was also drawn from the prison population.

The Young Adult Literacy Assessment (YALS) was conducted in the United States in 1985. This was a nationally representative household survey of 3,600 21-25 year olds. Again, prose, document and quantitative literacy scores were created, ranging from 0 to 500.

Statistics Canada’s 1989 Survey of Literacy Skills Used in Daily Activities (LSUDA) was based on YALS, and was a nationally representative survey of around 9,500 people. LSUDA measures reading ability and numeracy on a scale from 0 to 500.

The National Child Development Study NCDS is an ongoing birth cohort study of 17,000 people living in Great Britain who were born between 3 and 9 March 1958. A full survey was undertaken in 1991, and a 10% sub-sample was surveyed in 1995, when the cohort was 37. The 1995 survey included a test of basic literacy and numeracy skills. As with IALS, the tasks in this test measured participants’ ability to apply literacy and numeracy skills in an everyday context, for example in using a Yellow Pages directory. The test in the NCDS was considerably shorter than IALS, however, consisting of 41 questions and taking around 30 minutes to complete.

The National Longitudinal Study of the High School Class of 1972 (NLS72) and the High School and Beyond study of 1980 (HS&B) are two large longitudinal surveys of United States students first surveyed as high school seniors. In both surveys, participants were given very similar tests of basic mathematics, reading and vocabulary skills in their last year of high school. Scores in the maths tests had means between 12 and 14, depending on the year and whether the respondent was male or female, and standard deviations of around 7.

The National Longitudinal Survey of Youth (NLSY79) is a nationally representative sample of 12,686 14-22 year olds in the United States, first surveyed in 1979. In 1980, participants were tested on the Armed Services Vocational Aptitude Battery which included tests of mathematics knowledge, arithmetic reasoning (combined into a numeracy measure), word knowledge and paragraph comprehension (combined into a literacy measure).

The Dunedin Multidisciplinary Health and Development Study DMHDS is a longitudinal study of a birth cohort of 1,037 children born in Dunedin between April 1972 and March 1973. Members of the cohort have been studied at various ages from 3 to 26. At age 26, 95% of the original sample of children were still participating in the study.

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