EurActiv.com

EU news and policy debates across languages

03/12/2016

Illiteracy will cost global economy $1.2tn in 2015

Development Policy

Illiteracy will cost global economy $1.2tn in 2015

There are as many girls in school in the UK as there are out of school in Ethiopia.

[Stijn Debrouwere/Flickr]

Illiteracy is “a worldwide crisis” that will cost the global economy $1.2tn (£760bn) this year, the World Literacy Foundation (WLF) has warned. More than 796 million people are either completely illiterate, meaning they can’t read or write, or functionally illiterate, meaning they can’t perform basic tasks such as reading a medicine label, the WLF said in a report released on Monday (pdf).

People in rich and poor countries are “trapped in a cycle of poverty with limited opportunities for employment or income generation” because of illiteracy, the report said.

It used a formula developed by the UN’s Educational, Scientific and Cultural Organisation (UNESCO) that takes into account the size and structures of different countries’ economies. The formula estimates the cost of illiteracy to developing countries at 0.5% of their gross domestic product. In emerging economies, such as China and India, the cost stands at 1.2% of GDP, while in developed countries the cost is estimated at about 2% of GDP.

These estimates reflect a lower level of spending on social services such as welfare, health and the justice system in less developed countries, the report said.

This means that countries with the largest GDP are estimated to bear the highest cost of illiteracy. Rich countries lose some $898bn every year due to workforce illiteracy, which can reduce business productivity, while emerging economies lose $294bn, according to the report.


The US is projected to lose $362.49bn in 2015, more than any other country. This is followed by China with a $134.54bn loss and Japan with $84.21bn. The UK is losing $57bn. The developing countries with the biggest projections of illiteracy-related losses are Bangladesh with $1bn and Angola with $530m.

“There’s evidence that a person who is either completely illiterate or has functional illiteracy … that has a lifelong impact on them and their employment, and their ability to earn income. That’s [true] in all countries and all economies,” said Andrew Kay, CEO of the WLF.

The report said illiterate people earn up to 42% less than those who can read. Tasks that illiterate people can’t perform include:

  • Reading a medicine label
  • Reading a nutritional label on a food product
  • Balancing a chequebook
  • Filling out a job application
  • Reading and responding to correspondence in the workplace
  • Filling out a home loan application
  • Reading a bank statement
  • Comparing the cost of two items to work out which one offers the best value
  • Working out the correct change at a supermarket

But the costs extend beyond an individual’s wallet: illiteracy can result in poor health, hygiene and nutrition, high-risk sexual behaviour due to lack of awareness, and more workplace accidents.

Children’s reading skills must be improved at an early age to combat illiteracy, the WLF report said. Those with parents who hold professional jobs have heard more than 33m words by the time they began school. Children from disadvantaged backgrounds have heard just 10m over the same period.

Kay said: “We need to create greater awareness and education around illiteracy, particularly the importance of parents reading to their children in those early years… In our current society often we know there are more distractions – both digital distractions and other distractions – and as a result parents are reading less to their kids.”

The millennium development goals, which expire at the end of the year, targeted universal primary education and getting more girls enrolled in schools.

Today around 57 million children do not have access to primary school education, an improvement on 2000, when 100 million children were thought to be out of school, according to the UN’s 2015 MDG report (pdf).

The literacy rate among young people aged between 15 and 24 has increased globally from 83% in 1990 to 91% this year, the report said.

The WLF said efforts to get children enrolled in schools should be combined with strategies to ensure they stay in school and finish their education. It also said a global body should be created to manage resources for international literacy initiatives.