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Aggregate and Intergenerational Implications of School Closures: A Quantitative Assessment

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  • Youngsoo Jang
  • Minchul Yum

Abstract

This paper quantitatively investigates the medium- and long-term macroeconomic and distributional consequences of school closures through intergenerational channels. The model economy is a dynastic overlapping-generations general equilibrium model in which schools, in the form of public education investments, complement parental investments in producing children's human capital. We find that unexpected school closure shocks have long-lasting adverse effects on macroeconomic aggregates and reduce intergenerational mobility, especially among older children. Higher substitutability between public and private investments induces smaller damages in the aggregate economy and the affected children's lifetime income while exacerbating negative impacts on intergenerational mobility and inequality.

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  • Youngsoo Jang & Minchul Yum, 2024. "Aggregate and Intergenerational Implications of School Closures: A Quantitative Assessment," American Economic Journal: Macroeconomics, American Economic Association, vol. 16(3), pages 90-130, July.
    • Handle: RePEc:aea:aejmac:v:16:y:2024:i:3:p:90-130
    DOI: 10.1257/mac.20200442
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    1. Guido Neidhöfer & Nora Lustig & Mariano Tommasi, 2021. "Intergenerational transmission of lockdown consequences: prognosis of the longer-run persistence of COVID-19 in Latin America," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 19(3), pages 571-598, September.
    2. Jo Blanden & Matthias Doepke & Jan Stuhler, 2022. "Education inequality," CEP Discussion Papers dp1849, Centre for Economic Performance, LSE.
    3. Suzane Bellue, 2023. "Why Don’t Poor Families Move? A Spatial Equilibirum Analysis of Parental Decisions with Social Learning," CRC TR 224 Discussion Paper Series crctr224_2023_472, University of Bonn and University of Mannheim, Germany.
    4. Kurmann, André & Lalé, Etienne, 2021. "School Closures and Effective In-Person Learning during COVID-19: When, Where, and for Whom," School of Economics Working Paper Series 2021-18, LeBow College of Business, Drexel University.
    5. Agostinelli, Francesco & Doepke, Matthias & Sorrenti, Giuseppe & Zilibotti, Fabrizio, 2022. "When the great equalizer shuts down: Schools, peers, and parents in pandemic times," Journal of Public Economics, Elsevier, vol. 206(C).
    6. Nicola Fuchs-Schündeln & Dirk Krueger & André Kurmann & Etienne Lalé & Alexander Ludwig & Irina Popova, 2023. "The Fiscal and Welfare Effects of Policy Responses to the Covid-19 School Closures," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 71(1), pages 35-98, March.
    7. Nicola Fuchs-Schünde & Dirk Krueger & Alexander Ludwig & Irina Popova, 2022. "The Long-Term Distributional and Welfare Effects of Covid-19 School Closures," The Economic Journal, Royal Economic Society, vol. 132(645), pages 1647-1683.
    8. Marc Diederichs & Reyn van Ewijk & Ingo E. Isphording & Nico Pestel, 2022. "Schools under mandatory testing can mitigate the spread of SARS-CoV-2," Proceedings of the National Academy of Sciences, Proceedings of the National Academy of Sciences, vol. 119(26), pages 2201724119-, June.
    9. Werner, Katharina & Woessmann, Ludger, 2021. "The Legacy of COVID-19 in Education," IZA Discussion Papers 14796, Institute of Labor Economics (IZA).
    10. Titan Alon & Sena Coskun & Matthias Doepke & David Koll & Michèle Tertilt, 2022. "From Mancession to Shecession: Women’s Employment in Regular and Pandemic Recessions," NBER Macroeconomics Annual, University of Chicago Press, vol. 36(1), pages 83-151.
    11. Aparicio Fenoll, Ainoa, 2022. "The Uneven Effect of COVID School Closures: Parents in Teleworkable vs. Non-teleworkable Occupations," IZA Discussion Papers 15754, Institute of Labor Economics (IZA).
    12. Nicola Fuchs-Schündeln, 2022. "Covid-Induced School Closures in the US and Germany: Long-Term Distributional Effects," CESifo Working Paper Series 9698, CESifo.
    13. Makoto Nirei & Nao Sudo, 2020. "Necessities, Home Production, and Economic Impacts of Stay-at-Home Policies," IMES Discussion Paper Series 20-E-14, Institute for Monetary and Economic Studies, Bank of Japan.
    14. Nicola Fuchs-Schündeln, 2022. "Covid-induced school closures in the United States and Germany: long-term distributional effects," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 37(112), pages 609-639.
    15. Madeline Duhon & Lia Fernald & Joan Hamory & Edward Miguel & Eric Ochieng & Michael W. Walker, 2024. "Intergenerational Human Capital Impacts and Complementarities in Kenya," NBER Working Papers 32617, National Bureau of Economic Research, Inc.

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    More about this item

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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