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A new direct measure of an
qualifications or years of schooling is to assess the skills of adults directly. The
aspect of human capital is the
results of the International Adult Literacy Survey (see OECD, Human Resources
International Adult Literacy
Development Canada and Statistics Canada, 1997) provide a novel approach
Survey (IALS), in which adults
to the measurement of skills and competences in an international context. The
were tested on three literacy
survey has so far been carried out in 12 OECD Member countries, and creates a
scales, and assigned to one of five
model that could be used to test a range of attributes related to human capital.
levels of literacy on each scale...
Its main features are:
Detailed interviews with a large sample of the working-age population
(between 2, 000 and 8, 000 per country) in their homes, consisting of
both a test of respondents ability to carry out certain tasks and a
gathering of background information on the characteristics of
participants such as age, socio-economic status and participation in
various educational and other activities that may be associated with
human capital formation.
The definition of a number of domains of the type of skill being tested,
in this case prose literacy , document literacy and quantitative
literacy (see box). In each domain, respondents are required to
use the skills in question to perform tasks that simulate situations
that they are likely to confront in everyday life, including in a work
context.
The construction of a continuous scale of scores (from 0 to 500)
representing tasks of varying difficulties in each domain. Based on
the tasks performed, each respondent is assigned a single score for
each domain, which represents the highest level of task that they are
likely to succeed in, with a probability of 80 per cent.
A grouping of these results into levels of performance from 1 to 5,
22 with level 1 representing those who fail to perform at a specified
MEASURING THE STOCK OF HUMAN CAPITAL
minimum level (see box). These levels emphasise that there is no
single threshold at which adults can be said to have a skill relevant to
human capital, but rather that may have it to a greater or lesser degree.
This is particularly relevant in the case of literacy, since many past
analyses have assumed that everybody was either fully literate or
fully illiterate. The levels of literacy in the International Adult Literacy
Survey (IALS) represent the varying degrees of complexity in the
components of literacy skill needed in different situations in which
written materials are used.
The International Adult Literacy Survey identified literacy skills to cover demands at work, in the home and the
community. Each literacy domain is divided into five task levels of varying difficulty:
Literacy domains Literacy levels
Prose literacy: the knowledge and skills that Level 1: able at most to locate a single straightforward piece
are required to understand and use infor- of information in simple written materials.
mation from newspapers, fiction and
Level 2: able to locate pieces of information based on simple
expository text.
matching requiring a low level of inference.
Document literacy: the knowledge and skills
Level 3: able to use written materials making low-level
that are required to locate and use the
inferences taking account of multiple pieces of
information contained in official forms,
information.
timetables, maps and charts.
Level 4: able to perform multiple-feature or less straight-
Quantitative literacy: the knowledge and skills
forward tasks using complex information.
that are required to apply mathematical
operations in printed materials. Level 5: able to perform complex tasks combining several
pieces of information that must be searched for in
the written material.
A similar approach is now being developed by the OECD in partnership This approach could now
with a number of Member countries with respect to life skills , in domains be extended to other kinds
such as problem-solving, teamwork and information technology. This of life skills .
methodology is applicable to the measurement of a wide range of attributes
associated with human capital. As such tests are not inexpensive, however,
governments need to define carefully which kinds of skill they would most like
to measure.
High literacy shortfalls, especially among older cohorts
Although there is no single cut-off point that defines whether a person is IALS does not set a single
literate, the results of the International Adult Literacy Survey (IALS) show a worrying literacy threshold, but identifies
degree of under-performance. Performance at literacy level 3 is generally adults whose skills are likely
considered to be desirable in order to avoid difficulties in coping with social to be inadequate
and economic life in a modern democratic society. Although those on for the modern world...
levels 1 and 2 may be able to read and understand simple materials, they have
difficulties with the more complex tasks that are now required of workers and
citizens. So the proportion of the population performing at levels 1 and 2 can
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be taken to represent a shortfall relative to the desirable minimum.
HUMAN CAPITAL INVESTMENT AN INTERNATIONAL COMPARISON
... with typically between one- Figure 2.3 shows that of those tested, between one-quarter and just over
third and one-half of OECD one-half of OECD working-age populations perform below this desirable
adult populations judged likely to minimum at levels 1 and 2 except in Poland, where the proportion is above
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