Literacy and numeracy skills and labour market outcomes in Australia

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

The effects of vocational education on adult skills, employment and wages: What can we learn from PIAAC?

We have shown that vocational education does not perform as well as academic education both in labour market outcomes and in the level of basic skills, including literacy and numeracy. This is especially true for higher education. Only at the upper secondary or post-secondary level does vocational education perform slightly better than academic education in the probability of being currently employed as well as in the time spent in paid employment, although the differences we find are small

Economic impact of training and education in basic skills: summary of evidence (BIS research paper no.6)

This paper summarises recent quantitative evidence on the economic returns to having or improving literacy and numeracy skills. The summary includes evidence on earnings and employment, and distinguishes between returns to having basic skills whenever these are acquired, and returns to acquiring basic skills in adulthood. The review is confined to economic returns to individuals; macro effects - on productivity for example - are not considered

Review of research and evaluation on improving adult literacy and numeracy skills

The purposes of this literature review are threefold. First, this review summarises findings of the research from the last decade in six fields identified by the Department for Business, Innovation and Skills (BIS) as critical to its forward planning: (1) the economic, personal and social returns to learning; (2) the quality and effectiveness of provision; (3) the number of learning hours needed for skills gain; (4) learner persistence; (5) the retention and loss of skills over time; (6) the literacy and numeracy skills that are needed. Second, this review assesses this evidence base in terms of its quality and robustness, identifying gaps and recommending ways in which the evidence base can be extended and improved. Thirdly, this review attempts to interpret the evidence base to suggest, where possible, how returns to ALN learning for individuals, employers and wider society might be increased through effective and cost-effective interventions

The Role of Wage and Skill Differences in US-German Employment Differences

Greater job creation in the US than in Germany has often been related to greater wage dispersion coupled with less regulated labour and product markets in the US. Based on the Comparative German American Structural Database and the International Adult Literacy Survey we find that employment of skilled to unskilled labour is unrelated to differences in skill premium but that changes in relative employment are related to changes in relative wages raising the possibility of some substitution behavior. Still, the differing dispersion of wages is not a major contributor to differences in employment rates. The jobs problem in Germany is one of a general lack in demand for labor.

Measures of adult literacy and numeracy

Introduction: This paper explores the relationship between two different measures of adult literacy and numeracy. The Adult Literacy and Life Skills (ALL) Survey was an international survey of literacy, numeracy and problem solving skills undertaken in New Zealand in 2006. It provided information on the skills of the population, as well as wide range of background information on employment, qualifications and demographic characteristics. The Literacy and Numeracy for Adults Assessment Tool was developed to measure the literacy and numeracy of learners in New Zealand adult education settings. It was implemented from 2010. It provides results that are aligned with the Adult Literacy and Numeracy Progressions. Exploring the relationship between these two measures can give us a clearer understanding of the Assessment Tool results by comparing the results with internationally referenced information

Skills and selection into teaching: evidence from Latin America

This paper documents a novel stylized fact: many teachers in Latin America have low levels of cognitive skills. This fact is the result of both low levels of skills among the population and—in the case of numeracy—a gap between the average skill level of teachers and the rest of the tertiary-educated population (i.e., a teacher skills gap). To characterize the selection patterns behind this gap, we show that individuals with a teaching degree have lower average skills than individuals with other tertiary degrees, and that this gap is larger than the teacher skills gap. This difference is mainly explained by the selection into teaching of graduates from non-teaching degrees. Finally, we show evidence on one important determinant of the teacher skills gap: teacher relative wages are decreasing in skills

OECD Skills Outlook 2013 First Results from the Survey of Adult Skills

A decade after the publication of results from the first round of the Programme for International Student Assessment (PISA), its seminal assessment of the knowledge and skills of 15-year-olds, the OECD has conducted its first Survey of Adult Skills, which extends the assessment of skills to the entire adult population. The survey, a product of the OECD Programme for the International Assessment of Adult Competencies (PIAAC), focuses on skills – literacy, numeracy and problem solving – similar to those assessed in PISA; but the two studies use different assessment tasks, reflecting the different contexts in which 15-year-old students and older adults live. The surveys have complementary goals: PISA seeks to identify ways in which students can learn better, teachers can teach better, and schools can operate more effectively; the Survey of Adult Skills focuses on how adults develop their skills, how they use those skills, and what benefits they gain from using them. To this end, the Survey of Adult Skills collects information on how skills are used at home, in the workplace and in the community; how these skills are developed, maintained and lost over a lifetime; and how these skills are related to labour market participation, income, health, and social and political engagement