New study from Statistics Canada finds link between literacy and wages

Education Minister Judy Foote is encouraged by a new Statistics Canada study, released on January 25, which concludes that literacy skills have a positive effect on income levels.

The study, entitled Literacy Skills, Occupational Assignment and the Returns to Over-and Under-Education, found that employers tend to reward differences in literacy skills among employees who have attained the same levels of schooling.

"This study is important because it shows that there is a strong link between literacy skills and earning potential," Minister Foote said. "It also confirms the importance of literacy to society�s social and economic development, one of the major themes of our province�s Strategic Literacy Plan."

The Statistics Canada study uses Canadian data from the International Adult Literacy Survey (IALS) to explore relationships between wages earned by workers whose education is higher or lower than that required by their occupation. The IALS study was carried out between 1994 and 1998.

The study found that workers who are over-qualified for their occupation usually earn a higher income than workers who are under-qualified for their occupation.

However, individuals who are under-qualified for their position, and who also have above-average literacy skills for their level of schooling, tend to earn more because of their stronger literacy skills. According to the study, this seems to indicate that employers are able to determine the literacy skills of their employees by means other than simply depending on the level of schooling as an indicator.

"The findings of this study support the need for a greater awareness of literacy and its benefits to society," Minister Foote said. "While we may all recognize that reading is a pleasure, its importance in all other aspects of an individual�s life needs to be emphasized. Literacy is not just the means to an education, it is a key factor in an individual�s health and economic prosperity."

Media contact: Gay Decker, (709) 720-0048.

2002 01 28                          4:30 p.m.