This systematic literature review is aimed to investigate what previous research showed regarding use of phonics instruction in children's early reading development. Due to the fact that international studies such as PIRLS (Progress in International Reading Literacy  Study) showed that children´s reading ability in Sweden is getting lower and lower with each year. Every fifth student's ability to read is too low according to a Swedish report “This is how we solve the reading crisis in primary school”. To find out what the scientific research shows, the following research question was chosen: What effects does phonics instruction approach have on students' early literacy in the early years of primary school?Initially this study presents governments documents and their perspective on reading. Moreover, this study presentes PIRLS results that show that children's reading ability is getting lower with each year. Furthermore, this study presents definitions of two reading instruction methods Phonics and Whole language, phonological awareness and phoneme awareness. This study also shows research that analyzes how phonics methods affect students' early reading. Based on thematic analysis in this study scientific evidence has presented that teaching early reading by using phonics methods benefits all the student's reading skills, especially students who have developed decoding difficulties. The most central in phonics approach is to learn the alphabet and its function, that language sounds (phonemes) are represented by letters or combination of letters (graphemes). According to phonics, students need to be able to decode to be good readers. This literature review also presents results  that show how balanced teaching with elements of both phonics and whole-language approach is very beneficial in students' early literacy and how teachers competence in teaching early reading using phonics methods is important in students' early reading development.  

Keywords: phonics, primary school, phonological awareness