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The Importance of Functional Literacy: Reading and Math Skills and Labour Market Outcomes of High School Drop-outs

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  • Finnie, Ross
  • Meng, Ronald

Abstract

This study assesses the effects of literacy and numeracy skills on the labour market outcomes of Canadian high school drop-outs. We find that these skills have significant effects on the probability of being employed and on hours and weeks of work for both men and women, and also have strong (direct) influences on men's, but not women's, incomes. These findings imply that high school curricula that develop literacy and numeracy skills could provide significant returns even for those who do not complete their programs and wind up at the lower end of the labour market. Our findings similarly suggest that training programs catering to drop-outs could substantially improve these individuals' labour market outcomes by developing these basic skills. The results also have implications for dual labour market theory, since it is often assumed that the secondary market is characterized by minimal returns to human capital'contrary to what is found here.

Suggested Citation

  • Finnie, Ross & Meng, Ronald, 2006. "The Importance of Functional Literacy: Reading and Math Skills and Labour Market Outcomes of High School Drop-outs," Analytical Studies Branch Research Paper Series 2006275e, Statistics Canada, Analytical Studies Branch.
    • Handle: RePEc:stc:stcp3e:2006275e
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    File URL: https://www150.statcan.gc.ca/n1/en/catalogue/11F0019M2006275
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    References listed on IDEAS

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    Cited by:

    1. Kelly, Elish & McGuinness, Seamus & O'Connell, Philip J., 2012. "Literacy, Numeracy and Activation among the Unemployed," Research Series, Economic and Social Research Institute (ESRI), number RS25.
    2. Raquel Fonseca & Marie Mélanie Fontaine & Catherine Haeck, 2021. "Le lien entre les compétences en numératie et les rendements sur le marché du travail au Québec," CIRANO Project Reports 2021rp-11, CIRANO.

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    Keywords

    Education; training and learning; Employment and unemployment; Household; family and personal income; Income; pensions; spending and wealth; Job training and educational attainment; Labour; Literacy; Outcomes of education;
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