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This paper reports on 3-year collaborative study designed to improve literacy learning for Aboriginal youth by utilizing a ‘diversity as resource’ perspective. The study examined ways to merge the out-of-school literacy resources with school literacy practices for intermediate-aged Aboriginal students in a small Western Canadian city. The research was a qualitative study, utilizing ethnographic research methods and informed by sociocultural theory, in particular ‘third space’ theory. This school-university-community collaboration involved three interconnected groups of research participants: a teacher researcher study group; intermediate-aged Aboriginal students; and teacher candidates in a language and literacy methods classes who were partnered with students. Study findings suggest that the creation of third spaces around literacy learning contributed to school achievement for Aboriginal students.