The Impact of Human Capital in the American Labor Market Series - Skills, Earnings, and Employment - of Americans with Postsecondary Education Below the Bachelor’s Degree

Oct 15, 2026

Uploaded by Callum

Examines how literacy and numeracy skills affect labor-market outcomes for Americans with postsecondary education below a bachelor’s degree. Using PIAAC data, the report estimates the independent effect of skills across three groups: associate degree awardees, certificate awardees, and college non-completers. It assesses earnings and employment advantages by education and skills, then applies regression analysis to evaluate the likelihood of employment. Findings show education-related earnings gains diminish once foundational skills are included.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages81

Reading Time3 h 24 min

AccessFree to download

Preface

A Word About PIAAC

Earnings by Level of Education and Skills: An Overview

Earnings by Level of Education and Skills: A Closer Look

Employment Advantages of College Below the Bachelor's

Evidence from PIAAC

Regression Analysis of the Likelihood of Employment

Implications of the Findings

Appendices

Appendix A: Earnings and Skills of Persons with Education Below the Bachelor's Degree

Appendix B: The Employment to Population Ratio of Persons with Education Below the Bachelor's Degree Level

Appendix C: Score Boundaries and Task Descriptions for Each of the Six PIAAC Proficiency Levels on the Literacy Scale

Appendix D: Definitions of the Dependent and Independent Variables in the Earnings Regressions of 16-to 74-Year-Old Nonenrolled Workers, United States, PIAAC, 2012-2014-2017

Appendix E: Definitions of the Dependent and Independent Variables in the Employment Regressions of 16-to 74-Year-Old Nonenrolled Persons, United States, PIAAC, 2012-2014-2017

The Impact of Human Capital in the American Labor Market Series Skills, Earnings, and Employment of Americans with Postsecondary Education Below the Bachelor’s Degree Neeta Fogg, Paul Harrington, and Ishwar Khatiwada Rhode Island College Irwin Kirsch and Anita Sands ETS Table of Contents Preface ............................................................................................................ 1 Acknowledgments.................................................................................. 3 Introduction ................................................................................................... 4 A Word About PIAAC ..................................................................................... 6 Earnings by Level of Education and Skills: An Overview .......................... 7 Earnings by Level of Education and Skills: A Closer Look ........................ 7 Employment Advantages of College Below the Bachelor's ................... 16 Evidence from PIAAC ........................................................................... 18 Regression Analysis of the Likelihood of Employment .......................... 19 Implications of the Findings ....................................................................... 26 Appendices ................................................................................................... 32 Appendix A: Earnings and Skills of Persons with Education Below the Bachelor's Degree.............................................................. 32 Appendix B: The Employment to Population Ratio of Persons with Education Below the Bachelor's Degree Level ........................ 43 Appendix C: Score Boundaries and Task Descriptions for Each of the Six PIAAC Proficiency Levels on the Literacy Scale............... 47 Appendix D: Definitions ofthe Dependent and Independent Variables in the Earnings Regressions of 16-to 74-Year-Old Nonenrolled Workers, United States, PIAAC, 2012-2014-2017 ...... 49 Appendix E: Definitions ofthe Dependent and Independent Variables in the Employment Regressions of 16-to 74-Year-Old Nonenrolled Persons, United States, PIAAC, 2012-2014-2017 ....... 59 About the Authors ....................................................................................... 70 Endotes ......................................................................................................... 73 This report was written by: Neeta Fogg Paul Harrington Ishwar Khatiwada Irwin Kirsch Anita Sands The views expressed in this report are those of the authors and do not necessarily reflect the views of the officers and trustees of Educational Testing Service. Copyright © 2023 by ETS. All rights reserved. ETS and the ETS logo are registered trademarks of ETS. All other trademarks are the property of their respective owners. September 2023 ETS Center for Research on Human Capital and Education Research and Development Educational Testing Service Rosedale Road Princeton, NJ 08541-0001 Suggested citation: Neeta Fogg, Paul Harrington, Ishwar Khatiwada, and Irwin Kirsch, Anita Sands. Skills, Earnings, and Employment of Americans with Postsecondary Education Below the Bachelor's Degree, The Impact of Human Capital in the American Labor Market Series (Princeton, NJ: Educational Testing Service, 2023) . Preface Efforts to increase rates of college enrollment to meet growing demands from the labor market have been underway in the United States since the middle of the 20th century. By the first decade of the 21st century, policymakers and others were doubling down on these efforts, including calls for at least 60% of U.S. adults to have a college education. [ I] By 2021, it was clear those efforts were paying dividends: two-thirds (66.4%) of 25-to 29-year-old Americans attained college degrees or pursued some postsecondary education. [ II] For those who believe that postsecondary education is and should be the sole response f

FAQs

What data and framework does the report use to study human capital in the labor market?

It uses Programme for the International Assessment of Adult Competencies (PIAAC) data and estimates the independent effect of skills—literacy and numeracy—on labor-market outcomes and educational attainment-related outcomes.

Which education groups are analyzed for adults with postsecondary education below a bachelor’s degree?

The analysis covers associate degree awardees, certificate awardees, and college non-completers—adults with some postsecondary schooling but without a credential.

How do earnings advantages by education change when literacy skills are included?

When literacy is entered into the models, the reported returns to educational attainment levels decline, indicating that skills help explain differences previously attributed mainly to education.

Oct 15, 2026

Uploaded by Callum