Arbeitspapier
Returns to Skills around the World: Evidence from PIAAC
Existing estimates of the labor-market returns to human capital give a distorted picture of the role of skills across different economies. International comparisons of earnings analyses rely almost exclusively on school attainment measures of human capital, and evidence incorporating direct measures of cognitive skills is mostly restricted to early-career workers in the United States. Analysis of the new PIAAC survey of adult skills over the full lifecycle in 22 countries shows that the focus on early-career earnings leads to underestimating the lifetime returns to skills by about one quarter. On average, a one-standard-deviation increase in numeracy skills is associated with an 18 percent wage increase among prime-age workers. But this masks considerable heterogeneity across countries. Eight countries, including all Nordic countries, have returns between 12 and 15 percent, while six are above 21 percent with the largest return being 28 percent in the United States. Estimates are remarkably robust to different earnings and skill measures, additional controls, and various subgroups. Intriguingly, returns to skills are systematically lower in countries with higher union density, stricter employment protection, and larger public-sector shares.
- Language
-
Englisch
- Bibliographic citation
-
Series: CESifo Working Paper ; No. 4597
- Classification
-
Wirtschaft
Wage Level and Structure; Wage Differentials
Education and Research Institutions: General
- Subject
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cognitive skills
education
labor market
earnings
international comparisons
- Event
-
Geistige Schöpfung
- (who)
-
Hanushek, Eric A.
Schwerdt, Guido
Wiederhold, Simon
Woessmann, Ludger
- Event
-
Veröffentlichung
- (who)
-
Center for Economic Studies and ifo Institute (CESifo)
- (where)
-
Munich
- (when)
-
2014
- Handle
- Last update
-
10.03.2025, 11:41 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Hanushek, Eric A.
- Schwerdt, Guido
- Wiederhold, Simon
- Woessmann, Ludger
- Center for Economic Studies and ifo Institute (CESifo)
Time of origin
- 2014
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Returns to Skills around the World: Evidence from PIAAC
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Coping with Change: International Differences in the Returns to Skills
Coping with Change: International Differences in the Returns to Skills
Do better schools lead to more growth? Cognitive skills, economic outcomes, and causation
Returns to Skills around the World: Evidence from PIAAC
Skills, earnings, and employment: exploring causality in the estimation of returns to skills
Skills, earnings, and employment: exploring causality in the estimation of returns to skills
Families, Schools, and Primary-School Learning: Evidence for Argentina and Colombia in an International Perspective
Vocational vs. General Education and Employment over the Life-Cycle: New Evidence from PIAAC
Vocational vs. General Education and Employment over the Life-Cycle: New Evidence from PIAAC
Schooling, cognitive skills, and the Latin American growth puzzle
Schooling, cognitive skills, and the Latin American growth puzzle
Class-Size Effects in School Systems Around the World: Evidence from Between-Grade Variation in TIMSS
Coping with Change: International Differences in the Returns to Skills
Coping with Change: International Differences in the Returns to Skills