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OECD / How Inequality in skills is associated with inequality in income

How literacy skills are distributed across a population also has significant implications on how economic and social outcomes are distributed within the society. The Survey of Adult Skills shows that higher levels of inequality in literacy and numeracy skills are associated with greater inequality in the distribution of income, whatever the causal nature of this relationship. If large proportions of adults have low reading and numeracy skills, introducing and disseminating productivity-improving technologies and work-organisation practices can be hampered; that, in turn, will stall improvements in living standards.

Capture d’écran 2013-10-09 à 11.24.31

Those with lower skills proficiency also tend to report poorer health, lower civic engagement and less trust.

But the impact of skills goes far beyond earnings and employment. In all countries, individuals with lower proficiency in literacy are more likely than those with better literacy skills to report poor health, to believe that they have little impact on political processes, and not to participate in associative or volunteer activities. In most countries, they are also less likely to trust others. For example, on average across countries, individuals who perform at Level 1 in literacy are twice as likely to report low levels of trust as individuals who score at Level 4 or 5, even after accounting for their education and social background. While the causal nature of these relationships is difficult to discern, these links clearly matter, because trust is the glue of modern societies and the foundation of economic behaviour. Without trust in governments, public institutions and well-regulated markets, public support for ambitious and innovative policies is difficult to mobilise, particularly where short-term sacrifices are involved and where long-term benefits are not evident. Less trust can also lead to lower rates of compliance with rules and regulations and therefore lead to more stringent and bureaucratic regulations. Citizens and businesses may avoid taking risks, delaying decisions regarding investment, innovation and labour mobility that are essential to jump-start growth and regain competitiveness. Emphasising fairness and integrity in policy development and implementation, ensuring that policy making is more inclusive, and building real engagement with citizens all involve citizens’ skills.

Chosen excerpts by Job Market Monitor. Read the whole story at 

Capture d’écran 2013-10-09 à 11.27.47 via OECD Skills Outlook 2013

 

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