The Economic and Social Research Institute has published its guidelines for getting the long-term unemployed back into the workforce.
The ESRI said tackling illiteracy is the single most important factor in helping such people to come off the live register.
Co-author of the report, economist Alan Barrett, said the current growth in the economy meant that there are plenty of low-skill jobs available.
This creates a perfect opportunity, he said, as research shows that once people return to work, there is a better chance that they will remain in the workforce in the long term.
The Government has endorsed other recommendations in the report such as addressing transport and childcare problems and drug and psychological services.