Literacy, Numeracy, Technology Skill, and Labour Market Outcomes among Indigenous Peoples in Canada

Abstract

We use the 2012 Programme for the International Assessment of Adult Competencies to examine the relationship between information-processing skills, educational attainment, and labour market outcomes among Indigenous peoples in Canada. Relative to the non-Indigenous sample, we find negative earnings differentials, higher unemployment, and lower employment and labour market participation among Indigenous peoples, as well as important differences between First Nations, Métis, and Inuit workers. First Nations peoples show larger gaps in terms of earnings and employment outcomes. Moreover, Métis peoples show worse employment outcomes and negative earnings differentials in the upper part of the distribution. First Nations peoples also show sizable gaps in literacy, numeracy, and technology skill relative to the non-Indigenous sample. Not surprisingly, there is a positive relationship between information-processing skills and wages. However, the returns to skills are very similar for Indigenous and non-Indigenous peoples. That is, we find no evidence of economic discrimination. Once these skills are conditioned on, the earnings differentials decline. We also find that education can reduce skill and wage gaps, although the additional impact is small. The results imply the need to consider barriers to education faced by Indigenous peoples.