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Research piece

The Long Term Costs of Numeracy Difficulties (2008)

20 Jul 2018

Low numeracy costs the public purse £765 million per year

Competency in numeracy is an important factor not only for the wider economy, but also for social justice and mobility. Numeracy issues are linked to reduced employment opportunities, increased health risks, higher rates of depression, increased risk of exclusion from school and increased risk of involvement in the criminal justice system.

On the basis of existing data, KPMG estimated that low numeracy therefore costs the public purse £765 million per year when isolating the costs to those with only numeracy difficulties. Numeracy and literacy difficulties however often co-occur - the combined cost is approximately £2.4 billion.  

Inversely, providing effective numeracy interventions at age 7 and reducing the number of pupils who currently leave primary school with very low numeracy, could produce an annual saving to the public purse of £1.6 billion. 

KPMG. 2008. The Long Term Costs of Numeracy Difficulties. Every Child A Chance.

The research that contributed to shaping the report indicated that there are a number of costs associated with poor numeracy which cannot be quantified, but would cost the public purse: social housing, substance abuse, depression, pension participation and others. Therefore, the report is more likely to underestimate, than overestimate the true costs of numeracy difficulties to society. 

The report reviews a number of studies from the first decade of the 21th century that provided sufficient evidence to suggest there is a firm relationship between under-achievement in numeracy and social inequality. This is particularly the case for children from socially disadvantaged backgrounds. 

Having adequate (not high level) numeracy is strongly correlated with employment and earnings. Researchers at the London School of Economics have suggested that the wage premium from having adequate numeracy skills rose as we entered the 21th century, particularly for women. 

The costs in the report are extrapolated from the British Cohort Survey study. They should be treated with some caution as the studies were carried out in a different economic climate and policy context. 

Download the full report