6 research outputs found

    Literacy and numeracy skills and labour market outcomes in Australia

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    Australian adults are above the OECD average in literacy but only average in numeracy, according to a staff paper released by the Productivity Commission. The paper analyses the profile of adult literacy and numeracy skills in Australia, and how important those skills are for labour market outcomes. Key points: Adult literacy and numeracy skills contribute to wellbeing in many ways. At an individual level, they are central to social and economic participation. Literacy and numeracy skills are a core part of a person\u27s human capital. They also support the development of other forms of human capital, including knowledge, other skills and health. Some Australians have low (level 1 or below) literacy and numeracy skills. In 2011–12: 14 per cent of Australians could, at best, read only relatively short texts from which they were able to locate only a single piece of information. 22 per cent could only carry out one-step or simple processes such as counting where the mathematical content is explicit with little or no text or distractors. At the other end of the skill distribution, 16 per cent of Australians had high (level 4/5) literacy skills and 12 per cent had high numeracy skills in 2011–12. People with high literacy skills can make complex inferences and evaluate subtle truth claims or arguments in lengthy or multiple texts. People with high numeracy skills can understand a broad range of mathematical information that may be complex, abstract or embedded in unfamiliar contexts. Most Australians have skills somewhere between these levels. Groups with relatively low literacy and numeracy skills include: people with low levels of education; older persons; people not working; and immigrants with a non-English speaking background. Compared with other countries in the OECD, Australia performs above average on literacy but average in numeracy. Higher literacy and numeracy skills are associated with better labour market outcomes (employment and wages). Econometric modelling shows that: an increase in literacy and numeracy by one skill level is associated with an increased likelihood of employment of 2.4 and 4.3 percentage points for men and women, respectively an increase in literacy and numeracy skills is associated with a similar increase in the probability of employment, whether a person had a degree, diploma/certificate or Year 12 education an increase in literacy and numeracy by one skill level is associated with about a 10 per cent increase in wages for both men and women. This positive association is equivalent to that of increasing educational attainment from Year 11 to Year 12 or to a diploma/certificate up to 40 per cent of the association between education and employment is attributable to literacy and numeracy skills. These results are consistent with education providing many other attributes of human capital that are valued in the workplace more than half of the \u27penalty\u27 that affects the wages of people with a non-English speaking background is explained by their lower literacy and numeracy skills. • Staff working papers are not formal publications of the Commission. They have been prepared and are authored by individual staff to advance understanding of issues on the Commission’s supporting research program

    Links Between Literacy and Numeracy Skills and Labour Market Outcomes

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    This Productivity Commission staff working paper (by Anthony Shomos) was released in October 2010. Literacy and numeracy skills are key components of human capital, which is an important driver of economic growth. This paper utilises data from a 2006 survey on the literacy and numeracy skills of the Australian adult population. Models were used to estimate the effect of improved literacy and numeracy skills on the probability of labour force participation and on wages. Results confirm previous research in the human capital literature –– that improving literacy and numeracy skills has a positive, statistically significant effect on labour market outcomes. Improving educational attainment was also estimated to have a positive, statistically significant effect on labour force participation and on wages. However, once literacy and numeracy skills were controlled for, the effect of increasing educational attainment on labour force participation and on wages was reduced. Some of the benefit occurs because more highly educated people tend to have higher literacy and numeracy skills. Literacy and numeracy skills are developed through education, but they can also be enhanced in other ways. Understanding the factors that influence literacy and numeracy skills is important and could be further explored with the data used in this paper. The views expressed in this paper are those of the staff involved and do not necessarily reflect those of the Productivity Commission.literacy; numeracy; labour markets; human capital; labour force participation

    Effects of Health and Education on Labour Force Participation

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    The Productivity Commission Staff Working Paper, ‘Effects of Health and Education on Labour Force Participation’ (by Patrick Laplagne, Maurice Glover and Anthony Shomos) was released in May 2007. The paper explores alternative methodologies to obtain estimates of the labour force participation effects of the health and education variables targeted by the National Reform Agenda. The views expressed in this paper are those of the staff involved and do not necessarily reflect those of the Productivity Commission.Education, Employment, Health, Labour force, National Reform Agenda

    Effects of health and education on labour force participation

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    The National Reform Agenda (NRA) proposed in 2006 by the Council of Australian Governments (COAG) includes a human capital stream of reforms, designed to effect changes in health, education and work incentives. In 2006, the Productivity Commission undertook an assessment of the economic and fiscal impacts that NRA might produce by 2030, including impacts flowing from better health and education (Productivity Commission 2006). The potential economic benefits of better health and education have been the subject of increasing policy interest in recent times in Australia. This interest has largely been motivated by the projected implications of population ageing in terms of lowered labour force participation and output growth. The observation that Australia lags some comparable countries in terms of labour force participation has signalled one possible avenue for alleviating the economic effects of ageing. Also, claims that skill shortages may be limiting growth in some regions and industries have added to the interest in the potential for greater labour force participation to ease some of the economic bottlenecks Australia may encounter.  &nbsp
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