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Literacy & Numeracy Do They Really Matter?. W. Craig Riddell University of British Columbia Ministry of Training, Colleges and Universities Toronto, Ontario December 4, 2008. Objective of study. - PowerPoint PPT Presentation
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1
Literacy & Numeracy
Do They Really Matter?
W. Craig RiddellUniversity of British Columbia
Ministry of Training, Colleges and Universities Toronto, Ontario
December 4, 2008
2
Objective of study
• To investigate the factors that influence the literacy and numeracy
skills of Ontario residents
• To analyse the consequences of literacy and numeracy skills for key
labour market outcomes:
– participation in the labour force
– employment vs unemployment
– earnings
• Focus is on native-born non-aboriginal adult population in Ontario
• Some results for aboriginals and immigrants also provided
• Comparisons to other Canadian regions also provided
3
Outline of presentation
• Benchmark: how do skills of Ontario adults compare to those in other provinces?
• Determinants of skills: what are the key factors that influence cognitive skills?
• Consequences of skills: what are impacts of skills on labour market outcomes?
4
Data: IALSS 2003
• Key advantage: direct measures of cognitive skills
• Skills assessed: prose literacy, document literacy, numeracy,
problem solving
• Tests assess ability to apply skills in everyday settings
• Skills measured on a scale from 0 to 500
• Rich data on demographic and individual characteristics
• Large sample -- allows analysis at regional level
• Some groups over-sampled (e.g. aboriginals)
• All statistics and estimates use sample survey weights
5
Sample size and restrictions
• Main sample: focus on Canadian born, non-aboriginal population
• Some results also for Immigrant and Aboriginal samples
• Drop those whose main activity is “student”
• Worker sample: drop self-employed, unemployed, non-participants,
wage outliers
• Sample sizes, Canada: NB 14,637; IMM 3,738; ABOR 2,969
• Sample sizes, Ontario: NB 2,977; IMM 1,603; ABOR 130
6
Educational attainment
Information on years of completed schooling and highest level of
education
Separate question on high school graduation
Six main categories:
Less than HS
HS graduate
Non-university post-secondary without high school completion
Non-university post-secondary with high school completion
University bachelor’s degree
University postgraduate and professional degree
7
Sample characteristics I
• Tables 1a and 1b show composition by province/territory and
region
• Ontario (34%) and BC (30%) have largest proportions of
immigrants
• Territories have largest proportions of aboriginals
8
Table 1(a) Sample composition by province and territory
ProvinceFull Sample
(%)NB Sample
(%)IMM Sample
(%)ABOR Sample
(%)
NF 100 92 2 6
PE 100 94 4 2
NS 100 91 7 2
NB 100 94 4 2
QC 100 87 12 1
ON 100 64 34 2
MB 100 77 16 7
SK 100 89 5 6
AB 100 76 19 5
BC 100 65 30 5
YK 100 72 13 15
NT 100 53 10 37
YT 100 24 4 72
Total obs 21,371 14,637 3,738 2,969
9
Table 1(b) Sample composition by region
Region Full Sample (%)NB Sample
(%)IMM Sample
(%)ABOR Sample
(%)
East of Ontario 100 89 10 1
Ontario 100 64 34 2
West of Ontario 100 73 22 5
Total obs 21,371 14,637 3,738 2,969
10
Sample characteristics II
• Table 2 shows summary statistics for NB sample in
Canada, Ontario, East, West
• Average skills lower in East than in Ontario, but higher in
West
• Average years of schooling and proportion of university
grads highest in Ontario
• Most educated parents are in West, least in East
• Many second generation immigrants in Ontario and West
11
Table 2 Summary Statistics for the NB Sample Canada Ontario East of Ont West of Ont
Age 44.9 43.5 46.5 44.5
Experience 26 24.1 28.1 25.4
Years of Schooling 12.9 13.4 12.4 13.1
Educational Attainment
% Less than High School 24.7 23.4 28.3 21.8
% High School 32.1 33.3 30.3 33.2
% Non Univ PS w/o HS 2.5 2.5 2.1 3.1
% Non Univ PS with HS 23 21 23.5 24.4
% University BA 13.2 13.9 12.2 13.5
% Univ Postgrad 4.5 5.9 3.6 4
Prose Literacy 280.6 285.4 267.3 292.1
Document Literacy 278.2 283.2 263.6 291.1
Numeracy 269.2 272.4 257.9 280.0
Problem Solving 273.4 278.4 261.2 283.3
Average Skill Score 275.3 279.8 262.5 286.6
Number of Observations 14637 2977 7192 4468
12
Table 2 Summary Statistics for the NB Sample (Continued)
Canada Ontario East of Ontario West of Ontario
Mother’s education
% Less than High School 44.8 39.6 55.4 37.2
% High School 26.1 30.4 18.5 31
% Some Post Secondary 14 14.7 12.2 15.4
% BA or higher 7.5 8.5 5.6 8.8
% None reported 7.6 6.8 8.3 7.6
Father’s education
% Less than High School 48.8 57.3 57.3 41.9
% High School 19.6 14.4 14.4 24.9
% Some Post Secondary 11.6 10.6 10.5 11.8
% BA or higher 11.1 8.5 8.5 13.1
% None reported 8.9 9.2 9.2 8.3
Immigrant Parents
% Immigrant mother 16 22.9 5.9 20.9
% Immigrant father 18.6 27.5 6.3 24.2
Math in high school
% Good math grades 68.3 66.8 71.6 65.8
% Teachers went too fast 26.2 28 21.8 29.8
13
Skills of Ontario residents I
• Figure 1a shows average skills of other provinces
relative to Ontario, using full sample (NB + IMM +
ABOR)
• Skill measure is average of 4 IALSS skills
• Patterns for individual skills are similar
• East of Ontario: skills a bit lower (exc NS)
• West of Ontario: skills about 10 points higher
14
Figure 1(a) Comparison of mean skills – Ontario vs other provinces Full Sample
-10
-50
510
15M
ean
Ski
ll re
lativ
e to
On
tario
nf pe ns nb qc mb sk ab bc
Full Sample
15
Skills of Ontario residents II
• Fig 1b shows skills of NB population in each province
relative to Ontario
• East of Ont: skills 10 to 20 points lower
• West of Ont: skills 5 to 15 points higher
• Skills of NB in Man and Sask about the same
16
Figure 1(b) Comparison of mean skills – Ontario vs other provinces NB Sample
-20
-10
010
Mea
n S
kill
rela
tive
to O
nta
rio
nf pe ns nb qc mb sk ab bc
NB Sample
17
Skills of Ontario residents III
• Fig 1c shows skills of immigrants in Ontario relative to
other provinces
• Ontario immigrants have lower skills (except Man)
• Differences in immigrant skills are large
• Fig 1d shows data for Aboriginals
• Most provinces similar to Ont (except Alta)
18
Figure 1(c) Comparison of mean skills – Ontario vs other provinces IMM Sample
010
2030
40M
ean
Ski
ll re
lativ
e to
On
tario
nf pe ns nb qc mb sk ab bc
IMM Sample
19
Figure 1(d) Comparison of mean skills – Ontario vs other provinces ABOR Sample
-10
-50
510
15
Mea
n S
kill
rela
tive t
o O
nta
rio
nf pe ns nb qc mb sk ab bc
ABOR Sample
20
Skills of Ontario residents IV
• Overall, Eastern provinces have skill levels similar to
Ontario
• This results from NB skills that are lower and IMM skills
that are higher
• Combination of large immigrant population with relatively
low skills reduces average skill level in Ontario
• In Western provinces both NB and IMM populations
have higher skills
21
Determinants of skills I
• Strong positive association between skills and formal
education (Fig 2a)
• Relationship displays diminishing returns
• Gradient a bit steeper in Ontario
• Average skills and average years of schooling by level of
education (Fig 2b)
• Note skills and schooling among post-secondary grads
without HS
• Lower skills in Ont than West despite more years of
schooling
22
Figure 2 (a) Cognitive skills by years of schooling
15
020
025
030
035
0A
vera
ge S
kill
Sco
re
5 10 15 20 25Years of Schooling
East of Ont OntWest of Ont
23
Figure 2 (b) Average skill score by average years of schooling
NoGrad
PSwoHS
HSGrad
PSwHS
UnivBA
UnivPostGrad
NoGrad
PSwoHS
HSGrad
PSwHS
UnivBA
UnivPostGrad
NoGrad
PSwoHS
HSGrad
PSwHS
UnivBA
UnivPostGrad20
025
030
035
0A
vera
ge S
kill
Sco
re
5 10 15 20Average Years of Schooling
East of Ont OntWest of Ont
24
Determinants of Skills II
• Dependent variable in regressions is log of average skill score
• Small gender difference
• Essentially no relationship between skills and age in cross-section
• Strong relationship with education, but diminishing returns
• Impact of extra year of S: Ont @ S = 12 3.6% @ S = 16 2.1%
• Impacts similar elsewhere: East @ S = 12 3.1% @ S = 16 2.2%
• West @ S = 12 2.9% @ S = 16
2.3%
• OLS2 shows results by highest level of education
• Relative to HS dropouts, gains largest in East, lowest in West
25
Table 3 Determinants of skills (Ontario)OLS 1 OLS 2 OLS 3 OLS 4
Female -0.0208**(0.0097)
-0.0194*(0.0101)
-0.0168*(0.0097)
-0.0090(0.0095)
Years of schooling 0.0818***(0.0107)
-0.0747***(0.0104)
0.0667***(0.0111)
Schooling squared -0.0019***(0.0003)
--0.0018***(0.0003)
-0.0016***(0.0003)
Age 0.0048***(0.0016)
0.0033**(0.0017)
0.0069***(0.0017)
0.0076***(0.0016)
Age squared (/100) -0.0001***(0.0000)
-0.0001***(0.0000)
-0.0001***(0.0000)
-0.0001***(0.0000)
Educational Attainment
High School -
0.1504***(0.0168)
- -
Non Univ PS w/o HS-
0.0869***(0.0303)
- -
Non Univ PS with HS-
0.1996***(0.0181)
University BA-
0.2454***(0.0190)
- -
Univ Postgrad-
0.2988***(0.0210)
- -
26
Table 3 Determinants of skills (Ontario) continuedOLS 1 OLS 2 OLS 3 OLS 4
Mother’s education
Less than High School- -
-0.0295**(0.0123)
-0.0307***(0.0118)
Some Post Secondary- -
-0.0129(0.0132)
-0.0137(0.0127)
BA or higher- -
0.0088(0.0227)
0.0091(0.0215)
None reported- -
-0.0440*(0.0248)
-0.0479*(0.0247)
Father’s education
Less than High School- -
-0.0190(0.0144)
-0.0156(0.0141)
Some Post Secondary- -
0.0051(0.0159)
0.0084(0.0148)
BA or higher- -
0.0048(0.0165)
0.0130(0.0161)
None reported- -
-0.0569**(0.0259)
-0.0542**(0.0261)
Immigrant Parents
Immigrant mother- -
-0.0136(0.0142)
-0.0149(0.0138)
Immigrant father- -
0.0041(0.0126)
0.0044(0.0121)
Math in high school
Good math grades- - -
0.0463***(0.0115)
Teachers went too fast- - -
-0.0281**(0.0122)
Constant 4.8705***(0.0860)
5.5049***(0.0353)
4.9103***(0.0864)
4.9399***(0.0946)
Observations 2,977 2,977 2,977 2,977
R-squared 0.4886 0.4574 0.5067 0.5289
27
Skills generation: possible omitted variables bias
• Education and cognitive skills may be correlated with innate ability
• Ideal control would be IQ type measure at young age
• Proxies for innate ability I: parental education (OLS3)
• Proxies for innate ability II: ease of learning mathematics (OLS4)
• Parental education below HS has significant and moderately large
effects (combined effect about 5%)
• Modest decline in coefficient on years of schooling (< 10%)
• Ease of learning math also significant and moderately large effects
(combined effect about 7%)
• Adding both ability proxies: impact of education smaller (15%-20%)
but still large
28
Skills and labour market outcomes
• Analysis examines impacts of literacy and numeracy skills on key
labour market outcomes:
– participation in the labour force
– employment vs unemployment
– earnings
• Fig 3 (Canada) and Fig 4 (Ontario) show LF Participation Rate,
Employment Rate and Weekly Earnings by quartiles of the skill
distribution
• Much lower LF participation among low skilled (bottom quartile)
• Lower employment rate among low skilled
• Among those employed, lower earnings among low skilled
29
Figure 3 (a) % in labour force by quartile of skill distribution (Canada NB)
30
Figure 3 (b) % employed conditional on being labour force participants (Canada NB)
31
Figure 3 (c) Mean wages conditional on being employed by quartile of skill distributions (Canada NB)
32
Figure 4 (a) % in labour force by quartile of skill distribution (Ontario NB)
33
Figure 4 (b) % employed conditional on being labour force participants (Ontario NB)
34
Figure 4 (c) Mean wages conditional on being employed by quartile of skill distributions (Ontario NB)
35
Earnings, education and cognitive skills I
• Columns 1 and 2 in Table 4 report log earnings regressions
• Economic returns to education highest in Ont, lowest in West
• Note importance of distinguishing post-secondary grads with and without
HS, large impact of HS grad, large impact of university
• Column 3 adds controls for cognitive skills
• Returns to education decline by about 20% (9.2% to 7.3%)
• Thus about 20% of the returns to education arise from impact of education
on skills and impact of skills on earnings
• Impact of skills on earnings highest in Ontario (3.1% vs 2.3%/2.4%)
• 10 point increase in skills raises earnings by 31%, after controlling for other
influences on earnings
36
Table 4 Earnings regressions, worker sample, OntarioOLS 1 OLS 2 OLS 3 OLS 4 OLS 5
Female -0.3625***(0.0575)
-0.3721***(0.0554)
-0.3540***(0.0560)
-0.3535***(0.0565)
-0.3343***(0.0576)
Experience 0.0721***(0.0077)
0.0682***(0.0082)
0.0709***(0.0075)
0.0682***(0.0079)
0.0695***(0.0078)
Experience squared (/100)
-0.1244***(0.0170)
-0.1208***(0.0189)
-0.1192***(0.0165)
-0.1139***(0.0174)
-0.1171***(0.0173)
Years of schooling 0.0922***(0.0103)
-0.0734***(0.0109)
0.0728***(0.0111)
0.0731***(0.0113)
Educational Attainment
High School -
0.3524***(0.0945)
- - -
Non Univ PS w/o HS-
0.1767(0.1985)
- - -
Non Univ PS with HS-
0.5802***(0.1161)
- - -
University BA-
0.9233***(0.1065)
- - -
Univ Postgrad-
1.0591***(0.1246)
- - -
Average Skill Score- -
0.0031***(0.0008)
0.0033***(0.0008)
0.0028***(0.0008)
37
Table 4 Earnings regressions, worker sample, Ontario continued
OLS 1 OLS 2 OLS 3 OLS 4 OLS 5
Mother’s education
Less than High School - - - 0.0593(0.0684)
0.0584(0.0683)
Some Post Secondary - - - -0.0393(0.0846)
-0.0390(0.0849)
BA or higher - - - -0.0541(0.1045)
-0.0634(0.1047)
None reported - - - -0.0923(0.1321)
-0.1064(0.1296)
Father’s education
Less than High School - - - -0.0238(0.0778)
-0.0125(0.0776)
Some Post Secondary - - - 0.0569(0.0836)
0.0788(0.0844)
BA or higher - - - -0.1740*(0.1022)
-0.1269 (0.1013)
None reported - - - -0.1292(0.1349)
-0.1354(0.1351)
Math in high school
Good math grades - - - - 0.0530(0.0588)
Teachers went too fast - - - - -0.1397**(0.0617)
Constant 4.6641***(0.1677)
5.5166***(0.0935)
4.0066***(0.2333)
4.0232***(0.2290)
4.1381***(0.2456)
Observations 1,536 1,536 1,536 1,536 1,536
R-squared 0.3745 0.4103 0.3932 0.4071 0.4177
38
Earnings, education and cognitive skills II
• Columns 4 and 5 add proxies for innate ability
• Little change in impacts of skills on earnings with addition of controls
for parental education
• Parental education itself has little or no impact on earnings, once we
control for own education, experience and skills
• Ease of learning math has a large impact on earnings, and reduces
return to skills modestly
• Impact of skills on earnings remains large -- 28% gain in earnings
associated with 10 point increase in skills
39
Summary of main results I
• Overall, Eastern provinces have skill levels similar to
Ontario
• This results from NB skills that are lower and IMM skills
that are higher
• Combination of large immigrant population with relatively
low skills reduces average skill level in Ontario
• In Western provinces both NB and IMM populations
have higher skills
40
Summary of main results II
• Strong relationship between formal education and
literacy & numeracy skills
• Relationship displays diminishing returns, so largest
impact among least educated
• Impact of schooling on skills remains large after
controlling for innate ability
• Little evidence of influence of age on skills
• Parental education <HS has a negative impact on
literacy and numeracy
41
Summary of main results III
• Low skills associated with much lower LF participation,
higher unemployment, and much lower earnings among
the employed
• Impact of education on earnings higher in Ontario than
East and West
• Impact of skills on earnings also highest in Ontario
• 10 point increase in skills raises earnings by about 30%,
controlling for other factors
• About 20% of the economic return to education arises
from its cognitive skill generation effects
42
Appendix
• Deciles of NB skill distributions, Ontario and
Canada
• Skill Distributions by Region and Population
• Skills of Immigrants Relative to Native Born,
Canada and Ontario
43
Deciles of NB skill distributions, Ontario and Canada
Deciles Skill Scores (Canada NB) Skill Scores (Ontario NB)
10th 205.7 215.7
20th 235.7 242.95
30th 254.95 261.6
40th 269.8 275.25
median 281.45 285.2
60th 293.65 297.8
70th 304.3 308.65
80th 317.1 321.45
90th 334.3 336.85
max 416.05 401.3
44
Mean Skill distributions: Full Sample
0.0
02
.004
.006
.008
kde
nsi
ty d
skill
100 200 300 400Mean Skill
kdensity dskill Provinces east of Ontkdensity dskill Ontariokdensity dskill Provinces west of Ont
Full Sample
45
Mean skill distributions: NB sample
0.0
02
.004
.006
.008
.01
kde
nsi
ty d
skill
100 200 300 400Mean Skill
kdensity dskill Provinces east of Ontkdensity dskill Ontariokdensity dskill Provinces west of Ont
NB Sample
46
Mean skill distributions: IMM sample
0.0
02.0
04.0
06.0
08kd
ens
ity d
skill
100 200 300 400Mean Skill
kdensity dskill Provinces east of Ontkdensity dskill Ontariokdensity dskill Provinces west of Ont
IMM Sample
47
Mean skill distributions: ABOR sample
0.0
05
.01
.015
kde
nsi
ty d
skill
100 200 300 400Mean Skill
kdensity dskill Provinces east of Ontkdensity dskill Ontariokdensity dskill Provinces west of Ont
ABOR Sample
48
Percent of IMM population in each quartile of NB skill distribution (Canada)
49
Percent of IMM population in each quartile of NB skill distribution (Ontario)
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