Human Capital and Canadian Provincial Standards of Living

April 20, 200620 April 2006

Article Link

http://www.statcan.ca/Daily/English/060405/d060405c.htm

Full report available at:
http://www.statcan.ca/bsolc/english/bsolc?catno=89-552-MIE2006014

Prepared on behalf of Statistics Canada, this report by two University of Ottawa economists makes a statistical link between literacy and per capita income levels in Canadian provinces. Literacy, measured through the results of the Adult Literacy and Skills Survey, is examined as one of two main factors in human capital, along with university attainment.

The report indicates that the “effect of human capital on per capita income, whether measured by the literacy or the university attainment indicator, is positive and significant”. This result holds true across the provinces.

In previous international research, the authors found that literacy had a stronger impact on income levels than university attainment. The new national study, on the other hand, shows that the “literacy indicator does not outperform the university attainment indicator”.

The researchers examined female and male literacy separately and found that “there is no systematic evidence of gender-specific effects of literacy on provincial income per capita”.

The report also estimates that “the skills acquired by an extra year of schooling result in an increase in per capita income of 7.3 percent”.