The Impact of Human Capital in the American Labor Market - Skills, Skill Use at Work, and Earnings of American Workers

Oct 15, 2026

Uploaded by Connor

Report examines how foundational skills influence earnings in the American labor market, extending prior work that focused on literacy and numeracy to explicitly measure how workers use skills at their jobs. Drawing on PIAAC, it analyzes reading skills at work through descriptive statistics and links outcomes to earnings via multivariate regression. It also distinguishes acquired proficiencies from occupation-driven skill use, highlighting productivity and further skill improvement effects from more extensive engagement.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages72

Reading Time3 h 1 min

AccessFree to download

Preface

Introduction

Organization of this Paper

About the Data

Descriptive Analysis of Reading Skills at Work

Multivariate Regression Analysis of Earnings

Summary and Implications fo Findings

Appendices

Appendix A: Numeracy Proficiencies and Use of Numeracy Skills/Earnings Regressions

Appendix B: IRT-Based Reading and Numeracy Skill Use Scale

Appendix C: Details on PIAAC Proficiency Levels for Literacy and Numeracy Scales

Appendix D: Skill-Based Classification of PIAAC Occupations

Appendix E: Definitions of Variables in Earnings Regressions

The Impact of Human Capital in the American Labor Market Series Skills, Skill Use at Work, and Earnings of American Workers Neeta Fogg, Paul Harrington and Ishwar Khatiwada Center for Labor Markets and Policy Drexel University Irwin Kirsch and Anita Sands, ETS Table of Contents Preface .................................................................................................................... 1 Acknowledgments ......................................................................................... 3 Introduction ........................................................................................................... 4 Organization of this Paper ................................................................................... 6 About the Data....................................................................................................... 7 Descriptive Analysis of Reading Skills at Work .................................................. 8 Multivariate Regression Analysis of Earnings.................................................. 21 Summary and Implications fo Findings ............................................................ 33 Appendices ........................................................................................................... 39 Appendix A: Numeracy Proficiencies and Use of Numeracy Skills/Earnings Regressions .......................................................................................... 39 Appendix B: IRT-Based Reading and Numeracy Skill Use Scale ............47 Appendix C: Details on PIAAC Proficiency Levels for Literacy and Numeracy Scales............................................................................................... 51 Appendix D: Skill-Based Classification of PIAAC Occupations ............... 53 Appendix E: Definitions of Variables in Earnings Regressions .............. 55 About the Authors ............................................................................................... 63 Endotes ................................................................................................................. 66 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 © 2022 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. December 2022 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, Skill Use at Work, and Earnings of American Workers, The Impact of Human Capital in the American Labor Market Series (Princeton, NJ: Educational Testing Service, 2022) . Preface This report is the sixth in a series of papers designed to study the role of foundational skills in the American labor market. Previous papers analyzed the connection between literacy and numeracy skills, which serve as important measures of human capital, and the earnings of prime-age full-time workers, part-time workers, and employed college graduates. Other papers examined critical linkages between skills and nonpecuniary outcomes such as employment status. Although each of these reports reveal a strong positive link between literacy and numeracy skills and labor market outcomes, there is an important factor that these reports have not addressed—the use of skills at work. As with the previous reports in the series, this new report relies on the rich source of data from the Programme for the International Assessment of Adult Competencies (PIAAC), including direct assessment of literacy and numeracy skills and a host of informa

FAQs

What new dimension does this report add beyond earlier papers on literacy and numeracy?

It adds detailed measures of how frequently respondents report using reading, numeracy, and writing skills in their jobs, not just their skill levels.

How does the report distinguish between skills and skill use at work?

Skills describe workers’ acquired proficiencies, while skill use reflects an essential occupation characteristic—how reading, numeracy, and writing are required and used on the job.

Why do skills and their use at work relate to higher earnings in the report’s findings?

The report links earnings advantages to increased productivity when strong skills are utilized, and highlights that lack of skill demand limits opportunities to deploy those skills.

Oct 15, 2026

Uploaded by Connor