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Education, earnings and skills : a multi-country comparison
Author(s)
Date Issued
2003-03
Date Available
2008-11-07T17:36:12Z
Abstract
This paper uses the measures of basic skills (or functional literacy) in the International Adult Literacy Survey to examine the impact of education and basic skills on earnings across a large number of countries. We show that the estimated return to formal education is sensitive to the inclusion of these measures: excluding them biases the return to education upwards in many countries to a significant degree, usually 1 or 2 percentage points. In almost all countries, the test scores have a well-determined effect on earnings although there is considerable variation in the size of the effect. The highest returns to skills tend to be in English speaking countries. Comparing results across countries, the returns to education and the returns to basic skills are not correlated. The evidence suggests that there is considerable benefit in many countries for policy intervention to increase the skill levels of workers. This should not just be directed at dealing with low-skilled individuals – there are gains across the skills distribution.
Sponsorship
Atlantic Philanthropies
Type of Material
Working Paper
Publisher
Institute for Fiscal Studies
Series
IFS Working Papers
WP04/08
Copyright (Published Version)
2003 Institute for Fiscal Studies
Subject – LCSH
Wages--Effect of education on
Functional literacy--Economic aspects
Web versions
Language
English
Status of Item
Not peer reviewed
This item is made available under a Creative Commons License
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