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Functional Literacy, Educational Attainment and Earnings - A Multi-Country Comparison

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  • Kevin J Denny

    (University College Dublin)

  • Colm P Harmon

    (University College Dublin)

  • Vincent O’Sullivan

    (University College Dublin)

Abstract

In this paper a rich and innovative dataset, the International Adult Literacy Survey, is used to examine the impact of functional literacy on earnings. We show that the estimated return to formal education is sensitive to the inclusion of literacy - excluding it biases the return to education in many countries by significant amounts. Literacy itself has a well-determined effect on earnings in all countries though with considerable variation in the size of the effect. The benefits of literacy do not only arise from increasing low levels of literacy: increases at already high levels generate substantial increases in earnings in some countries. In general we find little interaction between schooling and literacy though for a few countries they appear to complement each other.

Suggested Citation

  • Kevin J Denny & Colm P Harmon & Vincent O’Sullivan, 2003. "Functional Literacy, Educational Attainment and Earnings - A Multi-Country Comparison," Working Papers 200319, School of Economics, University College Dublin.
    • Handle: RePEc:ucn:wpaper:200319
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    References listed on IDEAS

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    Cited by:

    1. Hanushek, Eric A. & Woessmann, Ludger, 2011. "The Economics of International Differences in Educational Achievement," Handbook of the Economics of Education, in: Erik Hanushek & Stephen Machin & Ludger Woessmann (ed.), Handbook of the Economics of Education, edition 1, volume 3, chapter 2, pages 89-200, Elsevier.
    2. Fasih, Tazeen & Kingdon, Geeta & Patrinos, Harry Anthony & Sakellariou, Chris & Soderbom, Mans, 2012. "Heterogeneous returns to education in the labor market," Policy Research Working Paper Series 6170, The World Bank.
    3. Kevin Denny & Patrick Orla Doyle, 2005. "Returns to basic skills in Central and Eastern Europe - a semi-parametric approach," Working Papers 200507, School of Economics, University College Dublin.
    4. Kevin Denny & Orla Doyle, 2010. "Returns to basic skills in central and eastern Europe," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 18(1), pages 183-208, January.

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