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Abstract

This study examines differences in returns to literacy skills on earnings of black and white men and women. Literacy skill is a composite measure of three scales: reading comprehension, document literacy (the ability to locate and use information in, say, tables and graphs), and mathematics proficiency. Using data from the National Adult Literacy Survey (NALS), we estimate earnings determination models separately for each racial/gender group. Our findings show that the effect of literacy on earnings varies by race and gender. Literacy skills favorably rewarded black men relative to black women and white men and women, net of education and other relevant variables. More importantly, literacy completely explained the effect of a high school diploma and some college on earnings of black men. We conclude that the economic importance of literacy skills is particularly salient for less-educated black men.

Keywords

Adult literacy Adult black males’ literacy Adult black females’ literacy Literacy and earnings

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Literacy Skills and Earnings: Race and Gender Differences

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