Benchmarking The Effective Literacy Rate

By now the importance of literacy in the process of development is widely accepted. However, unlike measuring welfare or inequality, the problem of literacy measurement remains largely unexamined. Alternatives to the standard literacy rate, R, equal to the number of literate adults as a percentage of the adult population, are not well known, but this measure has its deficiencies. In particular, several authors have identified the externality accruing to proximate illiterates, that is, illiterate people with access to a literate person. The standard literacy rate ignores this externality; measures of effective literacy are sensitive to it. The present note offers two effective literacy rates (measures) and a set of axioms characterizing each.