"This paper utilises data from a 2006 survey on the literacy and numeracy skills of the Australian adult population. Analysis reveals that literacy and numeracy skills for nearly half of the population were assessed at either levels 1 (the lowest level) or 2, both of which are below the minimum level deemed necessary to participate in a knowledge-based economy (level 3), [and they] vary according to a number of factors, and were generally highest for people who had either undertaken higher levels of education, were born in an English speaking country or were of prime working age (20-44 years old). Models were used to estimate the effect of improved literacy and numeracy skills on the probability of labour force participation and on wages. Results confirm previous research in the human capital literature -- that improving literacy and numeracy skills has a positive, statistically significant effect on labour market outcomes."--Key points, p. viii.