Learning to read and write requires an individual to connect additional orthographic representations to pre-existing mappings between phonological and semantic representations of words. Past empirical results suggest that the process of learning to read and write (at least in alphabetic languages) elicits changes in the language processing system, by either increasing the cognitive efficiency of mapping between representations associated with a word, or by changing the granularity of phonological processing of spoken language, or through a combination of both. Behavioural effects of literacy have typically been assessed in offline explicit tasks that have addressed only phonological processing. However, a recent eye tracking study compared high and low literate participants on effects of phonology and semantics in processing measured implicitly using eye movements. High literates’ eye movements were more affected by phonological overlap in online speech than low literates, with only subtle differences observed in semantics. We determined whether these effects were due to cognitive efficiency and/or granularity of speech processing in a multimodal model of speech processing – the amodal shared resource model (ASR, Smith, Monaghan, & Huettig, 2013). We found that cognitive efficiency in the model had only a marginal effect on semantic processing and did not affect performance for phonological processing, whereas fine-grained versus coarse-grained phonological representations in the model simulated the high/low literacy effects on phonological processing, suggesting that literacy has a focused effect in changing the grain-size of phonological mappings.