Self-perfection or self-selection? Unraveling the relationship between job-related training and adults' literacy skills

Abstract

Can participation in job-related training contribute to the formation and maintenance of adults’ literacy skills? Although evidence suggests that participation in training is related to higher literacy skills, it remains unclear whether this association reflects a causal effect of training participation on literacy (training effects), results from the self-selection of more high-skilled individuals into training (selection effects), or is due to other sources of endogeneity (e.g., omitted variable bias). To unravel these possibilities, we used data from the Programme for the International Assessment of Adult Competencies (PIAAC) and its German follow-up, PIAAC-Longitudinal (PIAAC-L). As these unique data offer repeated measures of literacy skills, spaced three years apart, in a large and representative sample, they allowed us to disentangle training effects from selection effects and to account for potential endogeneity. Analyses revealed that, even after taking account of formal education and a host of job characteristics, individuals with higher literacy skills were more likely to participate in training. By contrast, no evidence for effects of training on literacy skills emerged in any of our models, which comprised lagged-dependent, fixed effects, and instrumental-variable models. These findings suggest that, rather than job-related training contributing to literacy development, individuals with higher literacy skills are more likely to participate in training.