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September 2018
Skills and Earnings in the Full-Time Labor Market
Neeta Fogg, Paul Harrington, and Ishwar Khatiwada

At last count, only 11 states in the nation now require high school students to demonstrate essential skill proficiencies to graduate from high school. Education reform originally designed to ensure adequate skills development instead has given way to "alternative pathways" for demonstrating the proficiency required for graduation — including such standards as the offer of a full-time job or a "locally determined option," a blanket term designed to be wide open to interpretation.

Research for the ETS Center for Research on Human Capital and Education by Neeta Fogg, Paul Harrington and Ishwar Khatiwada of Drexel University's Center for Labor Markets and Policy found, however, that many students are not only getting a high school diploma, but a college degree as well, despite lacking the kind of literacy and numeracy skills that their credentials would lead you to expect them to have. As this report shows, these skills deficits have significant consequences, given the connections between skills and success in the labor market.

Using the U.S. results from the Programme for the International Assessment of Adult Competencies, or PIAAC, Skills and Earnings in the Full–Time Labor Market looked at full-time workers from ages 25 to 54 in 2012–2014 and found:

  • In both numeracy and literacy, the majority of full-time employed workers — whose highest level of education is a high school degree or equivalent — lacked a minimum level of skills (below level 3) on the PIAAC literacy scale.
  • The authors found that even those with a college education struggled to meet minimum levels: 49 percent of full-time workers with an associate degree, 29 percent with a bachelor's degree and 21 percent with a graduate degree did not perform at the minimum level in numeracy. The case is slightly better for literacy, but nevertheless, a third of those with an associate degree did not reach minimum levels.

Percent of Full-Time Workers, by Level of Educational Attainment, Falling Short of Minimum Skill Proficiency Levels

HS Diploma 76.5 66.9
Some College 56.6 41.2
Associate Degree 49.1 36.2
Bachelor's Degree 28.9 18.3
Master's Degree or Higher 20.8 13.4

SKILLS MATTER: A college education is no guarantee of proficiency in literacy and numeracy. According to PIAAC 2012–2014 results, 49 percent of those with an associate degree did not meet minimum proficiency levels for numeracy (below level 3). A sizable share of those with a bachelor's degree (29 percent) and with a master's degree or higher (21 percent) also did not. The picture was better for literacy, but many degree holders still lacked proficiency.

The authors found large earnings gains for those who scored at or above minimum skill levels:

  • The earnings of workers with level 3 literacy and numeracy skills were one-third higher than the earnings of their counterparts at the skill level directly below.
  • Workers with the strongest skills (levels 4 and 5) earned about 75 percent more than level 2 counterparts.

Skills and Earnings in the Full-Time Labor Market



Neeta Fogg, Paul Harrington, and Ishwar Khatiwada

Publication Date

September 2018

The ETS Center for Research on Human Capital and Education

Produces high-quality, evidence-based research that explores critical issues impacting opportunity in America today.

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