The director of the National Research Institute in Papua New Guinea says the government must provide free primary education if it wants to avoid major problems in the future.
The NRI has conducted a survey of 80 percent of population in 11 provinces to see how many people of school age are attending school.
Dr Thomas Webster says the survey showed less than half of the child population were in school.
Dr Webster says the government needs to fully subsidise fees if it wants to see an improvement in the fortunes of PNG.
"What will happen in ten years time, we forsee, we will have an adult population, half the adult population of Papua New Guinea illterate and not having the benefit of a basic education and that will cause real development problems."
Dr Webster says the main reasons given for not attending school were a lack of access and inability to pay school fees.