New research shows foundational literacy and numeracy skills boost opportunities for growth
By Anita Sands
Imagine if every person living within 20 U.S. states lived in poverty.
In 2023, over 36 million people in the United States met the Census Bureau criteria for official poverty – a number equivalent to the combined populations of Wyoming, Vermont, , Alaska, North Dakota, South Dakota, Delaware, Rhode Island, Montana, Maine, New Hampshire, Hawaii, West Virginia, Idaho, Nebraska, New Mexico, Mississippi, Kansas, Arkansas, Iowa, and Nevada, plus the District of Columbia.
This staggering number highlights the pressing and continued need for effective strategies to tackle the challenge of poverty. Poverty is, of course, not a standalone problem; it is often the result of a complex interplay of many issues including housing instability, job scarcity and quality, limited access to healthcare, government policies, historical inequities, and economic conditions. While education and skills are well-established tools for economic mobility, poverty itself creates significant barriers to accessing these tools. Nevertheless, education and skills remain essential in the quest to help address poverty and foster sustainable economic progress, even as their effectiveness is influenced by the very challenges they aim to solve.
The Long-Standing Belief in Education as the Key to Escape Poverty
In the United States, educational attainment has long been seen by policy makers as a key to escape poverty. In fact, U.S. antipoverty policies have traditionally focused on two main strategies: increase household incomes through financial support and improve employment prospects through education and training.
When education is narrowly measured by attainment, vital components can be overlooked—namely, foundational skills such as literacy and numeracy. Literacy encompasses the ability to comprehend and engage with texts, and numeracy encompasses the capacity to interpret, use, and communicate mathematical information. Together they provide essential tools for solving complex problems and achieving personal and professional goals.
These skills are often assumed by employers, policy makers and others to correlate with higher levels of education, but that does not appear to always be the case. They do, however, play an independent role in economic outcomes. In fact, stronger foundational skills in literacy and numeracy have been associated with better job prospects, higher wages, and greater participation in civic life, even among people with similar educational backgrounds.
How much better? Our latest research report, Skills and Proximate Poverty of Working-Age Americans, shows that adults with the lowest literacy skills have a poverty rate of 33%, compared to just 3% among those with the highest skills.
New Research Reveals the Impact of Skills on Poverty
Using data from the OECD’s Adult Skills Survey (PIAAC), the authors of this new ETS report developed a novel poverty measure analogous to the U.S. Census Bureau’s, creating an innovative way to explore the link between educational attainment, foundational literacy and numeracy skills, and poverty, or what the authors term “proximate poverty.”
While educational attainment remains a cornerstone in the fight against poverty, the authors found a twist in this well-known story: foundational skills like literacy and numeracy also play a critical role.
The OECD survey's nationally representative sample allowed the authors to first examine the connection between educational attainment and poverty status. They found, as largely expected, sharp reductions in the poverty rate with higher levels of attainment. Even when the authors accounted for factors such as current and past employment, school enrollment, health, and age, they found higher levels of education to be strongly associated with lower levels of poverty.
But here’s where it gets interesting—when the authors accounted for foundational skills like literacy and numeracy, the picture shifted. Foundational skills have their own poverty reduction story to tell, independent of educational attainment. For example, the association between earning a bachelor's degree and lower poverty levels, which is substantial, diminishes when researchers factored literacy and numeracy skills into the equation. In other words, while programs that promote degree attainment play a critical role in reducing poverty, so do those enhancing individuals’ foundational skills. These findings suggest that foundational skills are an important and independent factor in the broader context of poverty reduction.
Skills Matter More Than We Think
To reduce poverty effectively,
human capital programs and policies must deliver on their promise
by reducing individuals’ risk of poverty through
education and skills that equip them for success in the labor market.
Learners at all educational stages must be equipped with strong foundational literacy and numeracy skills to better prepare them for today’s world. To make additional inroads on fighting poverty we need to advance both attainment and skills. It’s not just about earning a degree; it’s also about making sure people have the foundational literacy and numeracy skills they need to thrive in today’s fast-paced, skills-driven labor market, economy, and society.
What Needs to Happen Next?
- Policymakers have the opportunity to deepen their impact on adult learners and workers with low skills by advancing learner focused opportunities and initiatives that integrate foundational skills training with employment-focused programs. These targeted approaches can strengthen pathways to sustainable economic opportunities.
- Funders/Program Officers are well positioned to amplify the effectiveness of poverty alleviation strategies by continuing to support initiatives that embed skills development into these efforts. This approach aligns with addressing root causes of economic hardship and empowering individuals, particularly through workforce training and retraining programs.
- K–16 Educators play a vital role in fostering foundational skills at every stage of learning. Continued emphasis on these skills can help ensure students are well prepared for long-term success.
Anita Sands is a lead policy research analyst in the ETS Research Institute. Her work focuses on addressing systemic inequities in education and economic opportunity by leveraging large-scale survey data to explore the intersection of education, skills acquisition, and life outcomes.