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RESEARCH PRODUCT

Employment Effects of Skills Around the World: Evidence from PIAAC

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Making use of an international survey that directly assesses participants’ cognitive skills, I study the effect of skills on workers’ employment in 32 countries. On average, a one-standard-deviation increase in numeracy skills is associated with a 7.6 percentage points increase in the probability of being employed. Controlling for years spent in education, the employment effect of numeracy skills falls to 4.8 percentage points. Numeracy skills account for 30 percent of the 2.7 percentage points employment effect that is associated with years of education. There is considerable heterogeneity across both subgroups and countries.