Employment effects of skills around the world

Periodical
International Labour Review
Volume
159
Year
2020
Issue number
3
Page range
307-338
Access date
March 23, 2023
Relates to study/studies
PIAAC Cycle 1

Employment effects of skills around the world

Evidence from the PIAAC

Abstract

Using an international survey that directly assesses the cognitive skills of participants, the author studies the effect of skills on employment in 32 countries. On average, a 1 standard deviation increase in numeracy is associated with an 8.4 percentage point increase in the probability of being employed, reducing the probability of being out of the labour force and unemployed by 6.4 and 2.1 percentage points, respectively. After controlling for numeracy, the estimated employment effect of years in education falls by one third, from 2.7 to 1.8 percentage points. Notably, the employment effect of skills is more pronounced in countries with higher unemployment.