Ebook The Value of Basic Skills in the British: Labour Market
The UK has a poor record in terms of the basic skills of its work force. In his influential report, Sir Claus Moser (DfEE, 1999 ) suggested that approximately 20% of adults in England had severe literacy difficulties at that time, whilst around 40% had some numeracy problems. The UK also compares poorly to other countries, in terms of the supply of basic skills, coming as it does in the bottom half of the OECD distribution, in terms of the proportion of adults having very low levels of literacy or numeracy (Leitch 2006). This lack of basic skills is confirmed by evidence that the labour market value of basic skills is also higher in the UK labour market than in many of our competitor countries (Denny et al. 2003; Hansen and Vignoles 2005). Such a high price for basic skills suggests a deficiency in supply. In recent years however, there have been concerted policy efforts to improve the supply of basic skills, such as the Skills for Life initiative, and this may have reduced the price paid for such skills. In this paper we use new data from the British Cohort Study to determine the labour market value of basic skills in the current (2004) UK labour market for a cohort of adults in their thirties. We also compare this to the value of basic skills for an older cohort (from the National Child Development Study, 1958 cohort) in the mid 1990s.
This paper contributes to the literature in a number of ways. Firstly, the existing evidence on the labour market value of basic skills is based on data from the UK labour market in the 1990s. Given that the supply of basic skills may have changed somewhat since then, it is important to assess the value of skills in today’s labour market as we do here. Also, unlike previous work that was largely based on surveys with very small sample sizes , the 2004 British Cohort Study survey provides basic skill assessments for the entire BCS cohort, resulting in substantially larger sample sizes. Lastly, we are also able to make comparisons over time, i.e. to determine whether (for individuals in their mid thirties) the value of basic skills has increased between 1995 and 2004.
The paper is set out as follows. The next section provides a brief overview of the literature which has examined the relationship between basic skills and labour market outcomes. Section 3 then discusses data and method. Section 4 presents results on the wage effects of literacy and numeracy and the relationship between basic skills and employment. Section 5 concludes.
contents
1. Introduction
2. Literature
3. Data and Methods
- Data and descriptive statistics
Methodology
Causality
Employment outcomes
4. Results
- The determinants of literacy and numeracy
Robustness checks and inferring causality
Changes over time
The relationship between basic skills and employment
5. Conclusions and Discussion
References
Appendices
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