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Lost Wages: The COVID-19 Cost of School Closures

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  • Psacharopoulos, George
  • Collis, Victoria
  • Patrinos, Harry Anthony
  • Vegas, Emiliana

Abstract

Social distancing requirements associated with COVID-19 (coronavirus) have led to school closures. In mid-April, the United Nations Educational, Scientific and Cultural Organization reported that 192 countries had closed all schools and universities, affecting more than 90 percent of the world’s learners: 1.5 billion children and young people. The closures are expected to reduce learning and will lead to future losses in earnings and labor productivity. Schooling attainment leads to increased earnings. What is not known is how much earnings will decline due to the school closures. Starting with the fact that every year of schooling equates to 8-9 percent in additional future earnings, this paper uses the number of months of education closures to estimate the loss in marginal future earnings. The findings show that the school closures reduce future earnings, and this loss is equivalent to 15 percent of future gross domestic product. The school closures will have a large and long-lasting impact on the earnings of future workers. It is also likely that students from low-income countries will be affected most. These estimates are conservative, assuming that the closures will end after four months and school quality will not suffer.

Suggested Citation

  • Psacharopoulos, George & Collis, Victoria & Patrinos, Harry Anthony & Vegas, Emiliana, 2020. "Lost Wages: The COVID-19 Cost of School Closures," GLO Discussion Paper Series 548, Global Labor Organization (GLO).
  • Handle: RePEc:zbw:glodps:548
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    As found on the RePEc Biblio, the curated bibliography for Economics:
    1. > Economics of Welfare > Health Economics > Economics of Pandemics > Specific pandemics > Covid-19 > Schools

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    Cited by:

    1. Carlana, Michela & La Ferrara, Eliana, 2021. "Apart but Connected: Online Tutoring and Student Outcomes during the COVID-19 Pandemic," IZA Discussion Papers 14094, Institute of Labor Economics (IZA).
    2. 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.
    3. Haelermans, Carla & Jacobs, Madelon & van Vugt, Lynn & Aarts, Bas & Abbink, Henry & Smeets, Chayenne & van der Velden, Rolf & van Wetten, Sanne, 2021. "A full year COVID-19 crisis with interrupted learning and two school closures: The effects on learning growth and inequality in primary education," Research Memorandum 021, Maastricht University, Graduate School of Business and Economics (GSBE).
    4. Stefanie Stantcheva, 2022. "Inequalities in the Times of a Pandemic," NBER Working Papers 29657, National Bureau of Economic Research, Inc.
    5. Silke Anger & Malte Sandner & Alexander M. Danzer & Axel Plünnecke & Olaf Köller & Enzo Weber & Samuel Mühlemann & Harald Pfeifer & Bernhard Wittek, 2020. "Schulschließungen, fehlende Ausbildungsplätze, keine Jobs: Generation ohne Zukunft?," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 73(09), pages 03-24, September.
    6. Ahn, Kunwon & Lee, Jun Yeong & Winters, John V., 2020. "Employment Opportunities and High School Completion during the COVID-19 Recession," ISU General Staff Papers 202010190700001114, Iowa State University, Department of Economics.
    7. Rosa Caiazza & Phillip Phan & Erik Lehmann & Henry Etzkowitz, 2021. "An absorptive capacity-based systems view of Covid-19 in the small business economy," International Entrepreneurship and Management Journal, Springer, vol. 17(3), pages 1419-1439, September.
    8. Nora Lustig & Valentina Martinez Pabon & Guido Neidhöfer & Mariano Tommasi, 2020. "Short and Long-Run Distributional Impacts of COVID-19 in Latin America," Working Papers 2013, Tulane University, Department of Economics.
    9. Engzell, Per & Frey, Arun & Verhagen, Mark D., 2020. "Learning Inequality During the Covid-19 Pandemic," SocArXiv ve4z7, Center for Open Science.
    10. Ijaiya, G.T. & Bello, R, A. & Ijaya, M.A. & Ijaiya, T.A., 2020. "Corona Virus (Covid-19), Lockdown And Well-Being: Views And Counter Views In The Streets Of Tanke-Bubu, Ilorin, Nigeria," Ilorin Journal of Economic Policy, Department of Economics, University of Ilorin, vol. 7(3), pages 24-40, June.
    11. Amodio, Emanuele & Battisti, Michele & Kourtellos, Andros & Maggio, Giuseppe & Maida, Carmelo Massimo, 2022. "Schools opening and Covid-19 diffusion: Evidence from geolocalized microdata," European Economic Review, Elsevier, vol. 143(C).

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    More about this item

    Keywords

    education; earnings; Covid-19;
    All these keywords.

    JEL classification:

    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • I20 - Health, Education, and Welfare - - Education - - - General
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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