Is Education a Good Measure of Low Skill?

Abstract

Is education a good measure of low skill? There are several ways to define a low-skilled worker, but there is no clear evidence as to which measure is best. This is problematic, as it is important to define a target group in order to implement the most effective training programs and direct them toward the right people. Understanding who should be considered a low-skill worker is essential to improving the living standard of the identified group. Our analysis is descriptive in nature, comparing characteristics between low-skill and high-skill respondents as defined by education level. A propensity score match and an unconditional two-sample t-test are also performed to see if any systematic differences in cognitive skill exist between the groups.

Our research uncovers three key findings: First, education is strongly associated with and therefore a good proxy for cognitive skill, with region of education producing the most sizeable difference in skill scores. Second, low skill scores identified among Atlantic low-skill workers educated within the region convince us that policy interventions should be directed toward this demographic, with a focus on the women in the category. Last, the Atlantic region is producing highly skilled workers relative to education level. The challenge now is finding a way to keep the most skilled labor in the region.