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Lost Wages: The COVID-19 Cost of School Closures

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Listed:
  • 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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    File URL: https://www.econstor.eu/bitstream/10419/217486/1/GLO-DP-0548.pdf
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    References listed on IDEAS

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    1. Bart Cockx, 2016. "Do youths graduating in a recession incur permanent losses?," IZA World of Labor, Institute of Labor Economics (IZA), pages 281-281, August.
    2. Joseph G. Altonji & Lisa B. Kahn & Jamin D. Speer, 2016. "Cashier or Consultant? Entry Labor Market Conditions, Field of Study, and Career Success," Journal of Labor Economics, University of Chicago Press, vol. 34(S1), pages 361-401.
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    5. Philip DeCicca & Harry Krashinsky, 2020. "Do Differences in School Quality Generate Heterogeneity in the Causal Returns to Education?," NBER Working Papers 27089, National Bureau of Economic Research, Inc.
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    Full references (including those not matched with items on IDEAS)

    Citations

    RePEc Biblio mentions

    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

    Citations

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    Cited by:

    1. 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.
    2. 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.
    3. Engzell, Per & Frey, Arun & Verhagen, Mark D., 2020. "Learning Inequality During the Covid-19 Pandemic," SocArXiv ve4z7, Center for Open Science.
    4. 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.
    5. 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).

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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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