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March 2007
Vol. 8, no. 3

Perspectives on Labour and Income

Literacy and employability
Ross Finnie and Ronald Meng

  • The functional literacy scores of both men and women who dropped out of high school were significantly below those of graduates. In addition, dropouts reported a weaker attachment to the labour market and lower average incomes than their more educated counterparts.
  • Among both graduates and non-graduates, literacy scores were consistently higher for women than for men in all employment categories.
  • Having learning difficulties as a child increased the probability of leaving high school early by 19 percentage points for both sexes. The likelihood of dropping out was also significantly higher for Aboriginal persons—14 points higher for men and 13 for women.
  • Having a disability did not directly influence the employability of men who had dropped out of high school, but it had a significantly adverse effect on women in terms of current and full-time employment, as well as the number of weeks worked.
  • Among men, increased literacy exerted a strong positive effect on incomes for both graduates and dropouts, while the number of years of education was highly significant for dropouts only. For women, the effect of literacy was significant for graduates but not dropouts, while the return to years of education was highly significant for both.

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Ross Finnie is with the School of Policy Studies at Queen's University and the Business and Labour Market Analysis Division at Statistics Canada. He can be reached at 613-533-6000, ext. 74219. Ronald Meng is with the Department of Economics at the University of Windsor. He can be reached at 519-253-4232, ext. 2371. Both authors can be reached at

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