Using a model of O-ring production function, the paper demonstrates how certain communities can get caught in a low-literacy trap in which each individual finds it not worthwhile investing in higher skills because others are not high-skilled. The model sheds light on educational policy. It is...

Using cross-sectional time series data from a large group of African countries, we examine the effects of income, institutions and social capital—with emphasis on the latter—on literacy and life expectancy. The empirical results confirm that income has a positive contribution. We also show...

Recent research links the inequality across countries and regions to colonial institutions. This paper argues that trade shocks could alter the development path of a country or subnational units, in spite of its colonial institutions. This hypothesis is analyzed using state-level data for...

Is there a reward for basic skills in the German labor market? To answer this question, we examine the relationship between literacy, numeracy and monthly gross earnings of full-time employed workers. We use data from the ALWA survey, augmented by test scores on basic cognitive skills as well as...

In this paper a rich and innovative dataset, the International Adult Literacy Survey, is used to examine the impact of functional literacy on earnings. The IALS surveys 12 OECD countries and sub-regions via a consistent questionnaire and includes a number of tests of numeracy and literacy, as...

This paper exploits an unusual policy reform that had the effect of reducing the direct cost of schooling in Ireland in the late 1960s. This gave rise to an increased level of schooling but with effects that vary substantially across family background. This interaction of educational reform and...

In this paper, we evaluate the effect of the literacy hour in English primary schools on pupil attainment. The National Literacy Project (NLP) was undertaken in about 400 English primary schools in 1997 and 1998. We compare the reading and overall English attainment of children in NLP schools as...

This paper uses data from the 1996 Australian Survey of Aspects of Literacy to examine the effects on labour market outcomes of literacy, numeracy and educational attainment. The survey includes a range of literacy and numeracy variables that are highly inter-correlated. A ?general to specific?...

Max Weber attributed the higher economic prosperity of Protestant regions to a Protestant work ethic. We provide an alternative theory, where Protestant economies prospered because instruction in reading the Bible generated the human capital crucial to economic prosperity. County-level data from...