Given the relevance of human capital in a knowledge-based economy to policy, it is essential to improve how it is measured, considering not only quantity, but also quality. We take advantage of a new survey with several tests that approximate several quality characteristics of human capital.

We focus on a reading comprehension test especially designing to measure the reading and comprehension ability of Chileans. The survey also includes information about cognitive abilities and psychological traits. By estimating a simple model of wage determination and labor participation, we find that the age, education, and marital status affect the odds of participating in the labor market. Additionally individuals with better reading comprehension skills tend to receive higher wages, confirming the hypothesis that they intrinsically have higher productivity levels. Despite this, cognitive abilities and psychological traits are not related to labor participation or wage determination.

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