How are Skills Related to Income: Cross-Country Analysis Based on PIAAC Survey

The current paper is devoted to the analysis of the relationship between cognitive and used skills and the monthly earnings of the person. The theoretical framework demonstrates the developing of the discussion about the concept “human capital” and the variety of its measurement in the second half of the XX century. During last decades the idea about the relation between human intellectual resources and his financial profit from the investment to the education was proved by lots of studies. However, continuing the discussion the theory of human capital was criticized, firstly, for the equating between the complex concept and years of education as its measurement. In this research the PIAAC data were used for detailed analysis of not only education level and cognitive skills but also including self-reported skills that mean competencies applied at work. These variables were included to the model according to the homogeneous skill theory. Speaking about cognitive skills, in the constructed models literacy is non-significant or has negative impact on the income. Numeracy has positive effect in all models. The most significant effect has the interaction effect between numeracy and HDI.