Skills and education: How well do educational qualifications measure skills?

3. Introduction

3.1: Purpose and key questions

Education aims to provide people with skills and competencies, as well as with knowledge. Therefore, it is widely assumed that people with higher qualifications tend to have higher skills. And conversely, those with higher skills tend to have gained higher qualifications. In part, these assumptions derive from the fact that it is easier to measure and recognise qualifications than it is to assess skill levels. For this reason, qualification level has often been used in research and analysis on trends in the labour market as a proxy for skills.

The Adult Literacy and Life Skills (ALL) survey, conducted in New Zealand in 2006 and in 12 other countries between 2003 and 2006, enables us to examine the relationship between skills and education more closely. ALL used standardised tests to measure certain skills of respondents directly and it also asked them questions about their education, family background, immigration status and employment. Consequently, we can examine the extent to which educational qualifications are a good proxy for skills. And we can use the ALL data to examine in more detail the characteristics of those for whom the ‘high education/high skills’ and ‘low education/low skills’ link does not hold.

This study uses the ALL data to examine how well qualifications can predict literacy and numeracy skills in the New Zealand adult population and then looks at the following questions:

• How many people have degree-level qualifications but low skills in numeracy and literacy?
• What are the demographic characteristics of that group? What is their employment status and occupation? What is their immigration status?
• How many people with low qualifications have higher-level literacy and numeracy skills? 
• What are the demographic and employment and immigration status of the people in that group?
  

3.2: The Adult Literacy and Life Skills (ALL) Survey

The Adult Literacy and Life Skills (ALL) Survey directly measured the literacy, numeracy and problem solving skills of an achieved sample of 7,131 New Zealanders aged 16 to 65 in 2006. The survey also collected extensive background information on education, employment, income and other areas.

The ALL survey tested skills across four domains:

• Prose literacy – the ability to read continuous texts, such as news stories and instruction manuals
• Document literacy – the ability to read discontinuous texts, such as maps and timetables
• Numeracy – the ability to read and work with numeric information
• Problem solving – the ability to reason in situations where no routine procedure exists.
  

The tests were designed to assess skills across the full range of competency, from limited to highly-developed skills. The tests were designed to cover general, cognitive skill levels and did not attempt to assess specialist knowledge and skills (Satherley and Lawes, 2007).

3.3: Report structure

The findings of this study are presented in three sections.

The first section looks at the extent of the relationship between educational qualifications and prose literacy and between educational qualifications and numeracy. It estimates the size in the New Zealand adult population of the two groups of interest in this study – degree qualified people with low literacy and/or numeracy and those with no post-school qualifications but high literacy and/or numeracy.

The second section looks in more detail at those with degrees or higher but low literacy and/or numeracy, looking at their demographic characteristics, their employment and occupational status, their immigrant status and their first language.

The third section looks in more detail at those with no qualification beyond secondary school level but high literacy and/or numeracy, looking at their demographic characteristics and their employment and occupational status.