The effects of adult literacy on earnings and employment

Vladimir Ponczek and Maúna Soares de Baldini Rocha

No 285, Textos para discussão from FGV EESP - Escola de Economia de São Paulo, Fundação Getulio Vargas (Brazil)

Abstract: This paper provides evidence of the effects of adult literacy on individuals’ income and employability in Brazil based on information obtained from the monthly employment survey (PME). The OLS results indicate that after controlling for observable characteristics, there is a 21.25% increase in wages for individuals who become literate; however, there is no significant impact on employability. Moreover, the findings show an 8.1% increase in the probability of being employed in the formal sector. We also explore the longitudinal structure of the dataset to control for unobservable fixed characteristics of individuals. The fixed-effects estimators show smaller effects compared to the OLS estimators. We find that literacy has a 4.4% effect on wages and a 4.3% impact on the probability of being formally employed. The effects are significantly different from zero.

Date: 2012-09-12
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Journal Article: The effects of adult literacy on earnings and employment (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:fgv:eesptd:285

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