The Importance of Literacy for Employment and Unemployment Duration

This study is the first to examine the impact of literacy on unemployment and employment duration. This study reveals important insights into in- and outflows. Unique register-based spell data and survey data are used and search theoretic explanations for the expected impact of literacy are considered. The results show that literacy is as important as formal education and labour market experience for transitions from employment in particular. In keeping with expectations, literacy is associated with longer employment durations, differing though across gender, cohabiting status and industries.