The study used Canadian data from the International Adult Literacy Survey to investigate the relationship between labour market success and literacy skills. The most commonly used and widely accepted measure of labour market success is earnings. Accordingly, this paper focussed on the relationship between literacy and annual, weekly and hourly earnings. It also takes into account other factors that influence labour market outcomes, such as educational attainment, gender and experience. Of that, about 3.1 percentage points result from the combined influences of education on literacy and, in turn, literacy on earnings.
Educational attainment appears to have a much larger impact on literacy than does work experience.
Results suggest that general labour market experience has little net effect on literacy. Results also provide some support for the view that literacy skills may play a role in how well immigrants adjust to their new labour market. The small number of immigrants in the sample precludes a stronger conclusion about the relationship between literacy skills and the earnings pattern of immigrants relative to the native-born. Further research is needed in this area. Individual earnings and parents' education levels are positively linked.