The Program for the International Assessment of Adult Competencies (PIAAC) is a large-scale study of adult cognitive skills and life experiences. PIAAC was designed to assess adults between the ages of 16 and 65 in different countries over a broad range of abilities, from reading simple passages to basic math to complex problem-solving in a technology-rich environment.
In this post, I’ll be focusing on the broad PIAAC subject areas of literacy and numeracy. PIAAC assessments are scored on a 0-500 scale, which are divided into proficiency levels. Here’s a simplified explanation of the proficiency levels for Literacy and Numeracy:
Literacy
Below Level 1 (0 – 175): Requires basic vocabulary knowledge but not the ability to understand the structure of sentences or paragraphs or make use of other text features.
Level 1 (176 – 225): Requires the ability to read short passages to locate a single piece of information.
Level 2 (226 – 275): Requires the ability to paraphrase, make low-level inferences, and reason about texts that may include competing pieces of information.
Level 3 and above (276-500): Requires the ability to identify, interpret, or evaluate one or more pieces of information in texts that may be dense or lengthy. Higher levels require the ability to select key information, interpret subtle evidence claims, evaluate the reliability of these claims, and be aware of rhetorical cues in a text.
Numeracy
Below Level 1 (0 – 175): Requires the ability to carry out simple processes such as counting, sorting, performing basic arithmetic operations with whole numbers or money, with little or no text or distractors.
Level 1 (176 – 225): Requires the ability to carry out basic mathematical processes involving counting, sorting, performing basic arithmetic operations, understanding simple percents such as 50%, in which mathematical content is explicit with little text and minimal distractors.
Level 2 (226 – 275): Requires the ability to apply two or more steps or processes involving calculation with whole numbers and common decimals, percents and fractions, in a range of common contexts where the mathematical content is fairly explicit or visual with relatively few distractors.
Level 3 and above (276 – 500): Requires the ability to understand mathematical information that is less explicit, perform multi-step calculations, work with mathematical relationships, patterns, and proportions expressed verbally or numerically, and interpret data and statistics in texts, tables and graphs. Higher levels require the ability to understand complex representations and abstract and formal mathematical and statistical ideas.
Comparative studies have shown that in most countries an increase of around 40 points in the PIAAC numeracy score leads to a wage increase of between 12% and 15% of the reference wage. But the wage increase is as high as 28% in the United States. So if the reference wage was $20 an hour, a wage increase of 28% would bring that up to $25.60 an hour, or an additional $224 a week for full-time workers.
And one study found that an increase of around 40 points in the PIAAC literacy score was associated with a 6% increase in hourly wages, on average, across several developed countries, including the United States. So if the reference wage was $20 an hour, a wage increase of 6% would bring that up to $21.20 an hour, or an additional $48 a week for full-time workers. [Sources: OECD (2016), Skills Matter: Further Results from the Survey of Adult Skills and Hanushek et al (2013), Returns to skills around the world: Evidence from PIAAC].
Bottom line: individuals with greater proficiency in literacy and math (i.e., numeracy) earn more, on average, than individuals who are less proficient. Numeracy appears to be particularly consequential for well-being in other ways as well. For instance, according to the OECD Working Paper, Numeracy Practices and Numeracy Skills among Adults (2018):
Many studies have shown that the level of numeracy can predict errors of judgment in decision-making.
Weak numeracy skills are associated with impulsiveness and risk taking.
People with strong numeracy skills are more likely to take strategic, rationally defined risks.
People with strong numeracy skills are also less impatient and prefer to delay a smaller immediate gain voluntarily in order to receive a greater future gain.
Basically, weak math skills predict less income, lower wealth, and poorer health across the life span. With that in mind, consider the following charts:
Note that in 2017 the average PIAAC black scores in literacy and numeracy were 41 and 53 points lower than the average white scores, respectively. Based on numerous cross-country studies, such differences in skill level would predict an average white-black wage gap of around 30%, which is pretty much what the bottom chart shows. Think how much smaller the white-black wage gap would be if white-black literacy and numeracy skills were similar. No doubt grades, education, college majors, and work experience matter as well - but then one rarely acquires good grades, advanced education and valuable work experience without solid literacy and math skills.
Hispanics’ PIAAC literacy and numeracy scores have also been much lower than white scores, on average and at least through 2017. Since Blacks and Hispanics together make up around a third of the US population, reducing the race and ethnic skills gap would go a long way to reducing income and wealth inequality in the country as a whole. As to how to go about improving literacy and math skills in the general populace, here are some ideas: reduce chronic stressors that interfere with children’s cognitive development (e.g., neighborhood violence, homelessness), improve K-12 schools, increase access to childcare, preschool, healthcare, and nutrition assistance; insure that cheap adult education and training programs are readily available, and provide an Adult Student Basic Income for qualified US residents, whether they’re in grad school or taking remedial English and math classes.
References:
Hanushek, E., G. Schwerdt, S. Wiederhold and L. Woessman (2013), “Returns to skills around the world: Evidence from PIAAC”, European Economic Review, Vol. 73, pp. 103-130, http://dx.doi.org/10.1016/j.euroecorev.2014.10.006 .
OECD Education Working Paper No. 177, Numeracy Practices and Numeracy Skills among Adults by Nicolas Jonas, OECD, July 19, 2018. http://www.oecd.org/officialdocuments/publicdisplaydocumentpdf/?cote=EDU/WKP(2018)13&docLanguage=En
OECD (2016), Skills Matter: Further Results from the Survey of Adult Skills, OECD Skills Studies, OECD Publishing, Paris. http://dx.doi.org/10.1787/9789264258051-en
U.S. Department of Education, National Center for Education Statistics, Program for the International Assessment of Adult Competencies (PIAAC), U.S. PIAAC 2017, U.S. PIAAC 2012/2014. https://nces.ed.gov/surveys/piaac/current_results.asp