Closing schools during the pandemic could have a lasting economic impact

School closures during the pandemic have undermined children’s knowledge in many G20 countries. They could thus have a lasting economic impact with potentially a 3% lower GDP in advanced economies, the International Monetary Fund (IMF) estimated on Tuesday.

Recent assessments of primary, middle and high school students and college students indeed show that widespread virtual education during the Covid-19 crisis has resulted in declining grade levels such as in India, Germany, the UK as well as than in Brazil and the United States, where some establishments remained closed for more than a year.

Revenue losses of 1.5% to 10%

Economists then started from the observation that today’s students will represent nearly 40% of the working-age populations in the G20 economies for decades to come. “While there are still a lot of unknowns, our simulations show that once all of these students are in the workforce, the gross domestic product of advanced G20 economies could be 3% lower in the long run” compared to estimates that had been made before the pandemic.

Unsurprisingly, it is the poorest households that have suffered the worst learning losses with prospects that “could be particularly diminished, further widening income inequality”. “Estimates suggest that if unfinished learning during the pandemic is not corrected, it could translate to 1.5% to 10% lost earnings over the lifetime for people” in G20 countries.