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A nation's Literacy rate is a measurement of its citizen's education and general thinking skills. Highly literate citizens have more Productivity while illiterate populations have less.

Literacy can be improved by most educational policies; Adult Education Subsidies, Faith School Subsidies, Public Libraries, State Schools, Technology Colleges, and University Grants. Likewise, situations that harm a nation's education system - such as a Teachers Strike or Teacher Shortage - will be reflected by reduced literacy rates. High levels of Internet Access will also foster literacy.

Low rates of literacy is the primary cause of a national Skills Shortage or being a Technology Backwater and high rates of literacy is a main factor in obtaining a Technological Advantage.

In Democracy 2, Literacy was replaced by Education.

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