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%T Lack of skills or formal qualifications? New evidence on cross-country differences in the labor market disadvantage of less-educated adults %A Heisig, Jan Paul %A Gesthuizen, Maurice %A Solga, Heike %J Social Science Research %N 83 %P 1-20 %D 2019 %K PIAAC (rounds 1 and 2); skills; social stratification %@ 1096-0317 %~ WZB %X We use PIAAC data on the literacy and numeracy skills of 49,366 25-to-54-year-olds in 27 countries to shed new light on cross-national variation in the labor market disadvantage of less-educated adults (i.e., those who have not completed upper secondary education). Our empirical analysis focuses on the occupational status gap between less-educated adults and those with a degree at the upper secondary level and yields three main findings. First, individual-level differences in literacy and numeracy skills are an important source of cross-national variation in labor market inequalities by educational attainment, but substantial gaps in occupational status remain even after accounting for individuals' actual skills and further socio-demographics. Second, this remaining occupational status gap rises with a country's level of "skills transparency" (i.e., the extent to which formal qualifications are more informative about actual skills): labor market gaps increase as the skills gap between the two educational groups increases and as the within-group distribution of skills becomes more homogeneous. Third, country differences in skills transparency seem to be the primary mediating channel for the inequality-enhancing effect of tracking in secondary education found in previous research. %C USA %G en %9 journal article %W GESIS - http://www.gesis.org %~ SSOAR - http://www.ssoar.info