Is there a link between a Country's GDP per capita and it's Literacy Rate?

Question

If so, What? Does a high GDP cause a high Literacy Rate and vice versa, or is a Countries Literacy rate dependant on another factor, if so, What?

Answer 1

Yes, there is likely a link between a country's GDP per capita and it's literacy rate. However, a high GDP does not cause a high literacy rate. A high literacy rate leads to a high GDP. Here is why.

A higher literacy rate generally means that the country is more educated. A more educated society leads to more technological advances which help productivity, one of the driving forces behind a high GDP. Without technological advances, the economy will stagnate, and growth will disappear, which will eventually cause GDP per capita to decline.

So yes, there is a link between the two. However, this factor is not the most important in determining a high GDP. Others such as property rights that protect the intellectual and personal property of entrepreneurs is very important, as places that have no property rights generally do not provide an incentive for individuals to develop new technologies. Also important is a stable government, as property rights cannot be protected if the government is easily toppled. That is why the countries with the highest GDP per capita are the ones with stable governments, property rights, and high literacy rates.

Answer 2

Without studying for many hours and days, I sampled a few countries per capita GDP and literacy. In the Philippines, the literacy rate was 96.3 in 2005. In that same year the GDP per capita was $1040.

So the preliminary answer to your question is counter intuitive - I don't think they are inherently linked. My guess is that high literacy is a function of the political, religious, or social institutions - not exclusively the economic

Answer 3

A high literacy rate is a pre-requisite to a highly productive economy, but it does not guarantee a highly productive economy.

And so all rich nations have high literacy, and no country with a very low literacy rate is wealthy. BUT, there are plenty of high-literacy countries that are poor.

Think this way: High productivity is a function of the variables a, b, c, d, e, ... and literacy is just one of those variables.

Answer 4

Absolutely. The more productive a country is, the wealthier it becomes. Literacy helps people communicate concepts, operate machinery and create intellectual property.

However once a country is literate other factors are required, like social trust and the rule of law. Russians may be great poets but nobody is going to open a cement factory if they are likely to be knee-capped by the local mafia.