WP14/2010

The costs of illiteracy in South Africa

Stellenbosch Working Paper Series No. WP14/2010

Author(s): Martin Gustafsson, Servaas van der Berg, Debra Shepherd, Cobus Burger

JEL Classification: C35, D23, I28, O15

Keywords: Literacy, Illiteracy, South Africa, Education production function, Economic growth

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Abstract:

In South Africa there has been a surge in publicly funded adult literacy education in recent years. There is a recognition that for the effective monitoring of adult literacy, direct measures of literacy are required. Grade attainment, self-reported ability to read and behavioural variables relating to, for instance, reading habits produce vastly different measures of adult literacy in South Africa. It is noteworthy that self-reported values change over time as people’s perceptions of what consitutes literacy shifts. A 75% literacy rate is arguably a plausible figure, though the absence of a direct measure is problematic. An education production function suggests that literacy-related parent behaviour, independently of parent years of education, influences performance of learners in school. In a multivariate employment model, self-reported literacy is a statistically significant predictor of being employed. In a cross-country growth model, poor quality schooling emerges as the variable requiring the most urgent policy attention to sustain and improve South Africa’s economic development. Both microeconomic and macroeconomic estimates suggest that with a more typical level of school performance South Africa’s GDP would be 23% to 30% higher than it currently is.