Skills Matter

Executive Summary

Technological change, particularly the increasing presence of information and communications technology (ICT) in all areas of life, together with changes in the structure of employment has led to a growing demand for higher-level cognitive skills involving the understanding, interpretation, analysis and communication of complex information. Employment is shifting away from jobs involving routine cognitive and manual tasks and towards jobs involving expert thinking and complex communication. Governments need a clearer picture, not only of how labour markets are changing, but of how well-equipped their citizens are to participate in, and benefit from, increasingly knowledge-based economies. The Survey of Adult Skills, a product of the Programme for the International Assessment of Adult Competencies (PIAAC), helps provide that picture. The survey was designed to provide insights into how well adult populations can perform the key skills society needs, and how they are using them at work and at home. It assesses the proficiency among adults (16-65 year-olds) in three key information-processing skills: literacy, numeracy and problem solving in technology-rich environments.

This report represents the final phase of the first cycle of the Survey of Adult Skills with the release of results from the six countries participating in the third round of data collection: Ecuador, Hungary, Kazakhstan, Mexico, Peru and the United States. Five of these countries undertook the survey for the first time while the United States had also collected data as part of the first round in 2011-12. With the completion of Round 3 of the study, a total of 39 countries and economies have participated in the study. The results show substantial variation across countries and economies in terms of adults’ average proficiency in the three domains assessed by the survey: some 100 score points separate the highest- and lowest-scoring countries in literacy and numeracy proficiency, although many countries score within a relatively narrow band. Proficiency scores in literacy and numeracy also vary considerably within countries: the average difference between the top and bottom 25% of adults was 61 score points in literacy and 68 score points in numeracy.

Low-skilled adults make up a significant share of the population in all participating countries and economies. On average across the OECD countries taking part in the survey, close to one-fifth of adults perform at or below Level 1 in literacy and numeracy. In some Round 3 countries like Ecuador, Mexico and Peru, more than half of adults score at or below these levels. Around one-quarter of adults in all participating countries have no or only limited experience with computers or lack confidence in their ability to use computers. In addition, nearly one in two adults are only proficient at or below Level 1 in problem solving in technology-rich environments. Adults at this level can only use familiar applications to solve problems that involve few steps and explicit criteria, such as sorting e-mails into pre-existing folders.

Skills proficiency and demographics

The survey finds very large differences in proficiency between tertiary-educated adults and those without an upper secondary education in all countries and economies. Among the Round 3 countries, these differences are especially pronounced in Hungary, Peru and the United States, but smaller than average in Ecuador and Mexico. In most countries, the relationship between age and proficiency tends to follow an inverted U-shaped curve, with a peak between the mid-twenties and the early-thirties. In contrast, among Round 3 countries like Ecuador, Mexico and Peru, proficiency declines more or less steadily with increasing age. This age-skills profile is likely to reflect the fact that upper secondary completion rates in these countries have increased only very recently.

Parents’ educational background, a proxy for socio-economic status, exerts a significant influence on adults’ proficiency in literacy. On average across OECD countries, adults with at least one tertiary-educated parent scored on average 40 points more than adults from families in which neither parent attained upper secondary education. Gender gaps in proficiency – which are negligible in literacy proficiency and average around 10 score points in favour of men in numeracy – are more pronounced among older adults. This could reflect either the fact that gender gaps in educational attainment are wider among older adults, or that women’s numeracy skills depreciate more over time, possibly because they are less involved in the labour market.

Skills use in everyday life and at work

Besides providing an insight into the level and distribution of key information-processing skills in the adult population and the relationships between proficiency in these skills and their educational and social background, the Survey of Adult Skills also collects information about how often adults engage in tasks that require the use of literacy, numeracy and problem solving, both in everyday life and at work. These data indicate that the use of skills in everyday life and at work are highly, albeit imperfectly, correlated at the country level – countries ranking low for the use of numeracy skills in everyday life also rank low in use at work, while those ranking high for everyday use also rank high for their use at work.

Numeracy proficiency and how often and intensively people use numeracy skills are positively but weakly correlated at the country level among high-income countries. The correlation strengthens when the middle-income countries are included, particularly Ecuador, Mexico and Peru. In almost all countries and economies participating in PIAAC, men engage in numeracy practices more often than women, both at work and in everyday life. Across all countries and economies, 55-65 year-old workers engage in numeracy practices at work less intensively than 25-54 year-olds. Compared to those with an upper secondary education, tertiary-educated respondents engage in numeracy practices more intensively, while those without an upper secondary qualification use them less intensively. These patterns hold for both everyday life and at work. These gaps between these educational groups are wider in all Round 3 countries, but especially in Ecuador, Mexico and Peru.

Proficiency and the labour market

Adults with greater proficiency in literacy, numeracy and problem solving in technology-rich environments tend to have better outcomes in the labour market than their less proficient peers. They are more likely to be employed and, if employed, to earn higher wages. On average, across the 39 countries and economies taking part in the Survey of Adult Skills, an increase of one standard deviation on the numeracy scale (around 57 score points) is associated with a 0.9 percentage-point increase in the likelihood of being employed rather than unemployed and a 7% increase in wages, when keeping years of education and other socio-demographic characteristics constant.

Results from the survey also show that mismatches between workers’ qualifications and skills and what they report as required or expected in their jobs are pervasive in most participating countries and economies. On average across the OECD countries participating the Survey of Adult Skills, about 22% of workers report that they are overqualified – that they have higher qualifications than required to get their jobs – and 13% report that they are underqualified.

Proficiency in literacy, numeracy and problem solving in technology-rich environments is also positively associated with several aspects of well-being identified using PIAAC. On average in participating OECD countries, proficiency in information-processing skills is positively associated with trust, volunteering, political efficacy and self-assessed health. The relationships with political efficacy and self-assessed health hold even after accounting for a range of socio-demographic characteristics.