Covid-19 could cause $10 trillion lost earnings for global economy: World Bank

The World Bank estimates a loss of $10 trillion in earnings, over time, for this generation of students – due to school closures in the wake of the Covid-19 pandemic. 

The global lender said, in a report, this would happen without remedial action when students start returning to school, and countries will be driven off-track to achieving their Learning Poverty goals.

School closures due to the pandemic have left most students on the planet out of school – 1.6 billion students at the peak in April 2020. This global shock to all education systems is being followed by a deep recession.  

Before the crisis, students were completing an average of 11.2 years of schooling throughout their school-age lives. However, when adjusted for the quality of learning, that amounted to only 7.9 years of schooling.  

The report titled "Simulating Covid-19 impacts on learning and schooling outcomes: A set of global estimates" reveals that five months of school closures due to Covid-19 will result in an immediate loss of 0.6 years of schooling, adjusted for quality, bringing the effective learning that a student can achieve down from 7.9 years to 7.3 years. It was released on June 18. 

"Not being able to attend school impacts children in many ways: children do not have an opportunity to learn, they may miss their most nutritious meal of the day, and too many students – especially girls – may lose out on the opportunity to complete their education, which will prevent them from achieving their potential," stressed Annette Dixon, World Bank vice-president for human development.

Prior to the outbreak of the novel coronavirus pandemic, the world was already struggling with a learning crisis, with 53 percent of children in low- and middle-income countries living in learning poverty – being unable to read and understand a simple text by age 10.

School closures will impact learning across the system.  In the case of lower secondary students, the share of students that do not attain the minimum competencies can increase from 40 percent to 50 percent because of the immediate shocks.

Compounding this, according to the report, as of the latest GDP projections, close to seven million students from primary and secondary education could drop out of school due to the income shock of the pandemic alone, and this number is likely to be revised further upwards as estimates of the magnitude of this economic crisis are revised.

The report says that the combination of being out of school and the loss of family livelihoods caused by the pandemic may leave girls especially vulnerable, and may exacerbate exclusion and inequality – particularly for persons with disabilities and other marginalised groups.

In the absence of effective compensatory action, school closures lasting five months and the unfolding economic shock could result, on average, in a reduction of $872 in yearly earnings for each student from today's cohort in primary and secondary school.  

This is equivalent to approximately $16,000 of lost earnings over a student's lifetime, at present value.

These learning losses could translate over time into $10 trillion of lost earnings for the global economy because of lower levels of learning, the lost months of schooling during the lockdown, and the potential to drop out of school. 

This is approximately 16 percent of the total expenditures in educating these students throughout their basic education.

Governments are pursuing a variety of approaches to mitigate school closures. The report notes that while some 130 governments are investing heavily in multiplatform remote learning and using this period to plan for when schools reopen, this is an opportunity to build an education system that is more resilient, adaptable to student needs, equitable, and inclusive; with a strong emphasis on the role of technology in teacher's training at scale and ensuring learning continuity between the school and the home.