The Impact of Cohort Dynamics on Skills Formation: Evidence from PIAAC

Serdar Polat, Baskent University

This paper examines the impact of demographic pressures, such as cohort size and child dependency ratio, on literacy and numeracy skills, using data from the Programme for the International Assessment of Adult Competencies (PIAAC). While years of education is commonly employed to measure human capital, it fails to fully account for the broader demographic and economic forces that influence educational quality. The results show that when GDP-adjusted years of schooling are considered, the negative effects of cohort size and child dependency ratio on both literacy and numeracy skills become more pronounced. These findings highlight that demographic pressures, such as larger cohorts and higher child dependency ratios, impose significant constraints on educational resources, which in turn affect skill development. Even after controlling for years of education, both cohort size and child dependency ratio remain significant predictors of literacy and numeracy outcomes. These results emphasize the importance of integrating demographic and macroeconomic factors into human capital models to better understand educational outcomes and workforce preparedness. This study underscores the need for policymakers to adopt a broader perspective on skills formation, considering not only individual educational attainment but also the demographic and economic context in which education occurs.

Keywords: Human Capital, Education, and Work, Economic Demography, Inequality, Disadvantage and Discrimination, Population and Development

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