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Did You Know Sept. 8 Is International Literacy Day? Here's How Literacy Impacts the Economy Thumbnail

Did You Know Sept. 8 Is International Literacy Day? Here's How Literacy Impacts the Economy

I am a couple of weeks early but get ready; September 8 is International Literacy Day, a day to celebrate and demonstrate the importance of education and literacy across the world.1 After 18 months and counting of challenges, loss, and adaptation brought on by COVID-19, the importance of literacy and education cannot be understated. 

In this article, we will examine how literacy affects our local and national economies. 

Literacy & the Economy

In the context of this article, literacy is the ability to comprehend written and spoken language. Literacy affects our interactions with the world around us, from casual conversations to simple and complex financial decisions. Hence, literacy and the economy are intertwined. Here are some ways that literacy influences the economy.

Income Levels

According to a study conducted by Gallup on behalf of the Barbara Bush Foundation for Family Literacy, there is a significant connection between literacy and income. The study compared average yearly income to average reading levels, finding the following connections:According to the study, a reading level below three is considered partially illiterate as scored on the PIACC Survey for Adult Skills. A score of one or lower means an adult would have trouble filling out a simple form.

  • Reading level zero to one: $34,127
  • Reading level two: $47,596
  • Reading level three: $62,997
  • Reading level four to five: $73,284

As of 2017, 52 percent of the U.S. population has a reading level under three.3 Given this stat, and the study above, increasing literacy levels could drastically improve national and local economies. Furthermore, the same Gallup study estimates that $2.2 trillion of additional income could be generated if all adults reached a reading level of three or higher.2

Employment Rates

Just as income is affected by literacy levels, so too is employment; 54 percent of employed individuals have a reading level of three or higher, while 64 percent of unemployed individuals have a reading level of two or lower.4 

Of course, there is a multitude of factors that influence employment, such as economic conditions. But, an increase in overall literacy could affect employment rates, as indicated by these stats. 


According to the U.S. Department of Justice, 75 percent of adult inmates in U.S. prisons are illiterate.5 This is most likely related to the other factors on this list as crime, employment, and opportunities are often linked.

Furthermore, the Department of Corrections places the daily cost of incarceration at $112.96 per inmate a day.6 This cost, alongside the economic loss resulting from incarceration, demonstrates the powerful connection between literacy, the economy, and imprisonment. 


Literacy also affects our ability to understand, process, and follow medical recommendations. And in terms of the economy, U.S. health literacy has been shown to result in economic inefficiencies of $106 billion to $238 billion annually.7

More importantly, low health literacy not only affects our economy but the livelihood of every individual. Literacy, therefore, not only impacts our healthcare expenses but our quality of life. 

Improving Literacy in the U.S.

According to the National Institutes of Health, a mother’s reading level is the greatest indicator of literary and academic success for children.8 One potential way to improve U.S. literacy could be to provide literary resources to parents. Investing in such programs would not only provide benefits to current generations, but generations to come.

It may be surprising to see how much literacy and the economy are interconnected. Implementing solutions to improve literacy could see drastic positive changes in healthcare, incarceration, average income, employment, and more.

  1. https://www.un.org/en/observances/literacy-day
  3. https://www.barbarabush.org/wp-content/uploads/2020/09/BBFoundation_GainsFromEradicatingIlliteracy_9_8.pdf
  5. https://nces.ed.gov/fastfacts/display.asp?id=69
  7. https://www.libraryjournal.com/?detailStory=How-Serious-Is-Americas-Literacy-Problem
  9. https://www.ojp.gov/ncjrs/virtual-library/abstracts/prison-literacy-connection
  11. https://www.doc.wa.gov/docs/publications/reports/200-AR001.pdf
  13. https://hsrc.himmelfarb.gwu.edu/sphhs_policy_facpubs/172/
  15. https://www.nih.gov/news-events/news-releases/improving-mothers-literacy-skills-may-be-best-way-boost-childrens-achievement

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