The determinants of literacy and numeracy, and the effect of literacy and numeracy on labour market outcomes

In this study we examine the determinants of literacy and numeracy among native-born Canadians. The role of literacy and numeracy as determinants of labour market outcomes is assessed, and both are found to contribute to the explanation of labour market status, weeks worked, and income. Significant differences in the male and female estimates are noted. Estimates of the return to years of schooling are shown to be sensitive to the exclusion of measures of literacy and numeracy. Further, the inclusion of these variables decreases the estimated return to years of schooling for males and increases the estimated return for females.