Policy-makers and many academics agree that the route to a high productivity workforce and a strong economy is via improvements in individuals’ skills and education. An important dimension to a person’s level of skill is his or her numeracy and literacy. On this dimension the UK has historically had a poor record in terms of the basic skills of its workforce. In his influential report on basic skills issues in the late 1990s, Moser (DfEE, 1999)1 suggested that approximately 20 per cent of adults in England had severe literacy difficulties, whilst around 40 per cent had some numeracy problems. In fact the situation has improved somewhat in terms of the literacy levels of younger workers: around 8 per cent of 34-year-olds have severe literacy difficulties in 2004. Yet poor basic skills remains a problem for a significant minority of the UK workforce. Having such poor literacy or numeracy is potentially a great impediment to personal well-being and satisfaction with life. Having low skills may also have economic implications.
Research from the National Research and Development Centre for Adult Literacy and Numeracy, and the Centre for the Economics of Education (CEE)2, explores this issue by focusing on the economic value of basic skills in the current (2004) labour market. The work addressed the following central policy questions:
• Do individuals with better basic skills earn more in the labour market, and by implication, have higher levels of productivity?
• Do individuals with better basic skills have better employment prospects, i.e. are they more likely to be in work?
• Has the value of basic skills in the labour market changed over time?
The answers to these questions potentially provide a compelling argument for greater investment in improving the basic skills of the workforce.