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The Value of Words: Literacy and Economic Security in Canada

Vivian Shalla and Grant Schellenberg
The Centre for International Statistics Canadian Council on Social Development

 Adult literacy is fundamental to the economic and competitive performance of modern nations. It is also crucial to individuals as literacy skills can make a difference in their prosperity level. Close to 50% of adults with low-level literacy live in low-income households, compared with only 8% of those with high-level literacy skills. To date, there has been little systematic research in Canada into the relationship between literacy and low-income households. This report seeks to fill that research gap.

The study, using data from the Canadian component of the International Adult Literacy Survey (IALS), addresses three topics: the relationship between literacy and economic security or well-being; the link between economic security and literacy practices; and the connection between economic security and the transfer of literacy skills from parent to child. The analysis establishes a strong link between economic security and literacy. (Note that the results presented in these highlights are for prose literacy only. However, the patterns revealed are similar for proficiencies on the document and quantitative literacy scales of the IALS.)

The 1994 International Adult Literacy Survey (IALS) defines literacy as the ability to understand and use written information to function in society, to achieve goals, and to develop knowledge and potential. Three types of literacy were measured by the IALS: prose, document and quantitative. They were defined as follows:

• Prose literacy: The ability to understand and use information from texts such as editorials, news stories, poems and fiction.
• Document literacy: The ability to locate and use information from documents such as job applications, payroll forms, transportation schedules, maps, tables and graphs.
• Quantitative literacy: The ability to perform arithmetic functions such as balancing a checkbook, calculating a tip, or completing an order form.

Based on the results of tests administered as part of the survey, respondents were classified into one of five levels for each type of literacy with level 1 reflecting the lowest literacy skills and level 5, the highest. Due to the small proportion of individuals at level 5, levels 4 and 5 have been combined.

In Canada, the most widely accepted statistical measure of straitened economic circumstances is based on Statistics Canada’s low income cut-offs (LICOs). These cut-offs are determined by the proportion of total income that a Canadian family spends on food, clothing and shelter. Statistically, a family is considered to be low-income if it spends 55% or more of its income on these three essentials.

Working-age adults with weak literacy skills were far more likely to be living in low-income households than those with strong literacy skills. The risk of living in a household below the LICO was six times greater for working-age adults at level 1 than for those at level 4/5 (47% vs. 8%). However, the likelihood of living in a low-income household was substantially reduced, from 47% to 22%, by having skills just one level above the lowest level of proficiency.

Sex plays a distinct role, which overrides literacy and its effect on household or personal income. For example, at all literacy levels, women were more likely than men to be living in low-income households and,at bothlevels 2 and 3, women’s likelihood of falling below the LICO was roughly twice that of men.

The average personal income of working-age adults with level 1 skills was approximately $16,400 per year, or only two-thirds the average personal income of adults at level 4/5 ($24,200). Men received approximately twice as much income as women at each literacy level. In fact, women with the highest literacy levels had an average annual income of $22,600 only slightly above that of men with the lowest literacy levels who earned an average annual income of $19,800.

Data on average household income further confirm the link between economic security and literacy, with level 1 individuals living in families reporting only half as much income as level 4/5 individuals ($28,100 vs. $61,200).

Working-age adults with weak level 1 skills (59%) were far less likely to have been employed during the year than those with strong level 4/5 skills (89%). Furthermore, those individuals who were employed had fewer weeks of work than adults with stronger literacy skills. In the year preceding the IALS survey (1993), only about 36% of working-age adults at level 1 had a full year of employment compared with 66% of those at level 4/5.

The large majority of men whose skills were at level 2 or higher had full-time employment. In contrast, less than one in three men with level 1 skills worked full-time. Women at all literacy levels tended to participate less than men in the paid labour force and a sizeable minority of women, particularly those with the weakest literacy skills, worked as homemakers.

Literacy skills are not static and need to be maintained and enhanced with regular use. Adults’ opportunities to cultivate literacy skills are shaped by many factors including labour market participation, the types of jobs they hold and their access to training and education. Because access to such opportunities varies widely some adults are less able than others to build on their literacy skills.

Adults with marginal literacy skills received less job-related training and education than those with high-level skills. For example, adults at level 4/5 participated in job-related training and education three times more often than adults at level1. As individuals with low-level literacy skills were more likely to live in low-income households, it follows that low-income adults also received less training. Individuals from low-income households wanted career or job-related training just as much as those who were in better economic circumstances and explained that cost was the most significant impediment to pursuing job-related training or educational opportunities. Conversely, lack of time was the main barrier for adults who were not in low-income households.

If workers are unable to cultivate their literacy on the job, their skills may deteriorate over time. This may have dire consequences for those employed in rapidly changing work environments. Overall, adults from low-income households are far less likely to engage in literacy activities on the job than are workers from other households. These adults show a low rate of involvement across a wide range of reading and writing indicators. This may reflect the low level of the worker’s own skills or it may be further evidence to support the finding that adults from low-income households appear to be concentrated in jobs that require fewer literacy skills and offer fewer opportunities to develop them.

Literacy, however, is not practiced exclusively at work: People have the opportunity to read and write in the course of daily activities and to maintain and enhance their literacy skills. Working-age adults from low-income households engaged in literacy activities outside of their work less often than those from non-low-income households. For example, 34% of adults from low-income homes read or used information from letters or memos weekly, compared with 56% of adults from non-low-income homes. Furthermore, adults in low-income households were six times more likely to need help reading newspaper articles and five times more likely to need help reading instructions on medicine bottles than adults who were not in low-income households. Similar findings, with less pronounced gaps, emerge when other literacy practices are compared..

Although economic disadvantage and limited opportunities may restrict their literacy activities, low-income parents nonetheless provide their children with at least some of the conditions needed to engage in literacy practices. Most homes, regardless of income status, have a variety of reading materials, although low-income households are somewhat less likely to have such items as newspapers and books.

Children from both types of households most often obtained their books from school libraries. Books purchased by parents and borrowed from public libraries were the next most common sources of reading material for children. A higher proportion of children from non-low-income homes made use of each of these sources. Almost all children from both types of households had their own books and were able to choose the books they read. In addition, about half of children from both low- and non-low-income households had time set aside each day for reading at home, and over half had limits on the time they were allowed to spend watching television.

Thus, it appears that most children, regardless of economic circumstances, have access to books and are provided with opportunities to read. But children from low-income households do not tend to read as frequently. For example, less than one-third of low-income parents reported that their youngest child read every day, compared with half the parents from non-low-income households.

This analytical report has clearly established a link between literacy and economic security, showing that Canadians with weaker literacy skills are more likely to be unemployed, work in lower-paying jobs and live in low-income households. The findings from this study also point to a connection between economic security and the practice of literacy. Adults living in low-income households receive less job-related training and education, and engage less frequently in activities (both on the job and in the home) that favour the development of literacy abilities.

While literacy is strongly associated with economic life chances and opportunities, this relationship is not as straightforward when gender is taken into account. The IALS data systematically show that women with stronger literacy skills are not as highly rewarded in the labour market as men with similar or even weaker literacy skills. The gender-segregated nature of the labour market and women's predominant responsibilities for household work and child care may help to explain why women derive fewer benefits from investing in their literacy skills.