The research presented in this report offers new insights about the relationship between changes in adult literacy and changes in employment and earnings. This paper will first describe the design and methodology of the Longitudinal Study of Adult Literacy (LSAL) and then present the key findings from LSAL about individuals' literacy growth over time and about changes in their employment and earnings over the same time periods. Analyses of these data will lead into statistical modeling of the relationship between changes in literacy proficiency and earnings. The paper will then examine other models in an attempt to sort out the directionality and reciprocity of influences between literacy and earnings. The paper concludes with a discussion of the findings and their limitations along with suggested directions for future research. (Contains 14 figures, 3 tables and 19 footnotes.)