The effects of schooling on literacy skills: A cross-national study from the International Adult Literacy Survey

Date of Award


Degree Type


Degree Name

Doctor of Philosophy (PhD)


Public Administration


Timothy M. Smeeding


Schooling, Literacy, International Adult Literacy Survey, Endogeneity

Subject Categories

Public Affairs, Public Policy and Public Administration | Social and Behavioral Sciences


This thesis examines the effects of schooling on literacy skills using International Adult Literacy Survey (IALS) collected from 1994 to 1998 in 20 countries. This thesis points out two notable limitations in the recent literature on a literacy production function: (1) a failure to address the nonlinear relationships of schooling to literacy skills; and (2) a failure to control for the endogeneity of schooling in cross-sectional literacy data.

This thesis consists of two major analytical components. First, this thesis examines four types of the observed nonlinear effects of schooling on literacy skills: diminishing returns to schooling, plateau effect, diploma effect, and interactive effects with parental education and age cohorts. This analysis is a first attempt to understand the nonlinear relationships between schooling and literacy skills across countries. Second, this thesis explores the endogenous effect of schooling caused by the unobserved ability factors in a literacy production function. Two estimation strategies are used to deal with the endogeneity problem: (1) using parental education as a proxy for the unobserved ability factor; and (2) using instrumental variables (IVs) deriving from the self-reported reasons for early school leaving, and education reform as natural experiments; and also the interactions between early school leaving, education reform, and age cohorts. Two major findings include: (1) the null hypothesis that schooling is exogenous is rejected in many IALS countries except Chile, Poland, Portugal, and Slovenia; and (2) the resulting IV estimates are much bigger than the corresponding ordinary least squares (OLS) estimates. The IV estimates provide rich cross-national evidence about the causal effect of schooling on literacy skills. The major findings of the IV estimates suggest that: (1) social policies that reduce early school leaving can significantly increase literacy skills; and (2) educational reforms that increase schooling for the disadvantaged group are effective ways to improve literacy skills for this group.

However, due to the limitations of the IALS data and endogeneity issues, this thesis could not identify how school quality and unobserved ability factors are related to the observed nonlinear relationships between schooling and literacy skills.


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