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Literacy-Targeted Instruction in Economics
The literacy-targeted (LT) approach to teaching introductory economics emphasizes mastery of fewer core concepts rather than superficial coverage of many. By focusing on the content that matters most, LT helps students build transferable knowledge they can apply in real-world contexts.
The term originated in 2002, but the idea has deeper roots—dating back to a 1950 AEA report and reinforced by economists such as George Stigler and Robert Frank, who argued that principles courses should focus on fewer ideas taught more deeply.
Why it matters: about 80% of students take only one economics course, and only 2% go on to major. LT asks, “What should go into the only economics course most students will ever take?”
Research Evidence
Studies from the University of Toronto (13,000+ students) and UNC Chapel Hill (7,000+ students) found that LT students perform just as well in advanced courses as peers from traditional courses, while gaining stronger real-world economic literacy. This makes LT a Pareto-efficient outcome—better for most students without disadvantaging future majors.
Avi Cohen: If Students Only Take One Econ Course, What Should They Learn?
Avi Cohen: If Students Only Take One Econ Course, What Should They Learn?
What should go into the only economics class most students will ever take? Avi Cohen, professor of economics at the University of Toronto, says the answer is a literacy-targeted approach—focusing on mastering a few core concepts that students can truly use, rather than skimming many they’ll quickly forget. In this episode, Cohen joins St. Louis Fed Economic Education Officer Scott Wolla to discuss how this approach benefits every student, including future economics majors.
Listen to the Teach Economics podcast episode.
FAQ: How is the LT approach Pareto-improving?
Q: Who benefits from LT instruction?
A: The majority of students. About 80% of students take only one economics course. LT gives them durable, transferable knowledge—core concepts like opportunity cost, incentives, and equilibrium—that they can apply in real life, civic decisions, and careers.
Q: What about students who go on to major in economics?
A: They are not harmed. Research with tens of thousands of students (Toronto, UNC Chapel Hill) shows that LT students perform just as well in advanced courses as those taught through traditional broad-coverage methods.
Q: Why call this “Pareto-improving”?
A: In economics, a Pareto improvement means making some people better off without making anyone worse off. LT does exactly that:
One-and-done students → better off, since they leave with practical economic literacy.
Future majors → no worse off, since their preparation for upper-level courses is the same.
Q: What’s the big takeaway?
A: LT is Pareto-improving because it raises outcomes for the vast majority of students while maintaining outcomes for majors—everyone wins.
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