Minorities, Cognitive Skills and the Incomes of Canadians

This paper uses the Statistics Canada Survey of Literacy Skills Used in Daily Activities (LSUDA) to investigate minority-white income differences and the role cognitive skills play in those patterns. Some minority groups have substantially lower (tested) levels of literacy and numeracy skills than whites and other more economically successful minorities and, in the case of certain male groups, these differences play a significant role in explaining the observed income patterns. The ethnic-white income gaps are, however, much smaller for women, and the literacy and numeracy variables do not have much of a role to play in explaining those differences. Various policy implications are discussed.