The deterioration in the performance of school students has slashed billions from Australia's economic wellbeing.

The release of data this week showing Australian teenagers are falling behind many of their international peers has cut the value of the Fairfax-Lateral Economics wellbeing index, which puts a dollar figure on our collective welfare. The index uses reading scores from the international Programme for International Student Assessment (PISA) to measure Australia's human capital, or collective knowhow. The latest PISA result, released on Tuesday, showed Australia's reading score dropped from 512 to 503 between 2012 and 2015.

"This worsening of the PISA reading scores has negatively impacted the level of economic wellbeing," the index report said.

That deterioration has sliced $15.2 billion from Australia's wellbeing since 2012.