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Do literacy and numeracy pay off? On the relationship between basic skills and earnings

Author

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  • Antoni, Manfred
  • Heineck, Guido
Abstract
What is the value of basic skills in the German labor market which until recently was considered to be strongly regulated but has gained flexibility in the last 15 years? To answer this question, we examine the relationship between adults' literacy, numeracy and earnings. We use data from the ALWA-ADIAB database, which is a test augmented survey linked to administrative data, making information on both skills and earnings most accurate. Preliminary results indicate that earnings are positively related to both types of skills. This relationship is more pronounced for numeracy than for literacy. Heterogenous results are found when running separate regressions for sub-groups, for instance by sex.

Suggested Citation

  • Antoni, Manfred & Heineck, Guido, 2012. "Do literacy and numeracy pay off? On the relationship between basic skills and earnings," VfS Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century 65404, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc12:65404
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    More about this item

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • C83 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Survey Methods; Sampling Methods

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