Huge long-term economic losses due to Covid-19 disruption to education

Posted on Monday, 28 September 2020
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The OECD has just published a paper on 'The Economic Impacts of Learning Losses'. This paper estimates that long-term impacts of Covid-19 induced learning disruption on the outcomes for students from the equivalent of first class at primary level to the leaving certificate and also looks at the potential annual loss of GDP as a result of lower incomes, lower tax revenues, lower skill levels and productivity and higher reilance on social protection systems. The paper draws attention to important issues beyond just the economic impact of school closures.  It also examines the effectiveness of home learning and what this could mean for the development of skills.  It found that learning opportunities were significantly reduced dring the school closures and the reductions were greatest for disadvantaged children.  

Impact on learning

In terms of lost learning, home learning and the impact on development and skills the main findings are:

  • There are indications from multiple countries that many children had little effective instruction in terms of home learning.
  • Early data from the US suggests that the learning progress of students has suffered a strong decline during the crisis especially in schools in low income areas[1].
  • Early data from Germany shows that the time that children spent on school-related activity per day was halved during the Covid-19 school closure period.  38% of students studied for school for a maximum of 2 hours per day, and 74 % studied for no more than 4 hours.  By contrast the time spent with TV, computer games and smart phones (passive activities) increased to 5.2 hours per day.  More than half of students had group online lessons less than once a week.
  • Schooling at home relies considerably on the instructional skills of parents and broad availability of internet access, computers and tablets. 
  • The negative impact of school closures and home schooling was greater for those students from disadvantaged households.  This is not simply an issue of ‘closing the digital divide’, students require explanations and support from trained teachers to acquire new skills, learning and information.  Closing the digital gap will not close the learning gap, a key point that should guide policy as we reopen our schools. 
  • What students learn throughout 2020 is likely to be significantly less than that in 2019.  Of concern is that as learning is a dynamic process that builds on prior learning, extended closures will lead to growing deficits.
  • Closed schools not only mean a disruption to learning, they also mean a loss of already acquired skills on which further learning and skills development could be built. 

The impact of school closures in Ireland have been analysed by the CSO[2] and discussed in a recent article on our website.  The main findings echo those of international studies with more than four in ten students reporting a major or moderate negative impact on their learning, similar impacts in terms of negative impacts on social development and over half reporting that they did not learn enough during school closures.  As with international evidence, a digital divide has an impact, but ultimately the lack of instruction and explanation from teachers, and being absent from a school and learning environment had a negative impact on students at primary and second level. 

Impact on Early Childhood Education

The OECD report notes that an important area that is not explicitly covered in this report but which will have a long-term impact on individuals and national economies is early childhood education.  Early childhood education and care has a profound and long-lasting impact on individual lives and on societies. It means that later learning is more effective and more likely to continue throughout life, lessening the risk of early school-leaving, increasing the equity of educational outcomes, and reducing costs for society in terms of lost talent and of public spending on social, health and even justice systems. 

The critical development window of early childhood is particularly important for preparing disadvantaged students for schooling.  Crucially, it is the stage where education can most effectively influence the development of children and help reverse disadvantage. The disruption of this segment of the education system will likely have lasting long-term impacts on children.  

Economic Impact

When it comes to the economic impact of interrupted learning and education on the individual students’ earnings throughout their lifetime and on national GDP the findings are stark.  Education equips people with the skills that makes them productive and also provides them with the knowledge and skills to generate and apply new ideas and innovations.  National economies that go forward with a less skilled labour force face lower economic growth. 

Among the main findings of the OECD report in terms of the economic impact of interrupted learning and education are:

  • The impact of Covid-19 induced school closures have resulted in significant learning losses to the affected students and these losses will follow students into the labour market.  These students face long-term losses in income.
  • An average student can expect around 3% lower earnings throughout their lifetime as a result of the interruption to their education.  This estimate should be considered the lower end of potential losses as higher skill levels are significantly linked to employment and higher earnings.
  • Disadvantaged students will almost certainly see larger impacts on the lifetime earnings.
  • In terms of countries, an optimistic scenario is a loss of 1.5% GDP throughout the remainder of the century, with this loss expected to be even greater if education systems are slow to return to prior levels of performance.  This estimate assumes that no further cohort of students will be affected by school closures, and assumes an immediate return to prior levels of performance. 
  • The magnitude of these potential losses on individuals and on national economies are enormous.  Sustained actions to improve the education opportunities for current and future students is required. 

How to respond

Investment in improving and strengthening education systems at all levels is required.  School closures as a result of Covid-19 threaten to exacerbate existing inequalities within education systems and lead to increased inequality in society.  When allocating resources, the serious cost of not learning must be considered and comprehensive measures must be taken to ensure that learning takes place again.