School-Closing Costs Are Crushing Children and Parents
(Bloomberg Opinion) -- There are lots of compelling reasons for schools to reopen in the fall. Children need the educational, social and psychological benefits that a normal, five-day school week provides. Working parents need relief. Teachers and school staffers need the work. Here’s another: The global economy will suffer along with the future earnings of today’s students if they don’t.
A consensus estimate among economists is that an additional year of schooling increases wages by around 9%. If last spring and this fall should be written off, then keeping the schools closed may lead to a significant reduction in future earnings for today’s students. My back-of-the-envelope calculation suggests that represents a loss of over $30,000 per decade in earnings for a typical worker who graduated high school but didn’t attend college. The longer schools are closed, the larger the hit future earnings will take.
Of course, this is a simplification. Virtual learning isn’t the same as no learning, and the rate of return on an additional year of schooling will vary a lot from student to student. But the basic point holds: Keeping kids out of school is likely to take a significant sum of money out of their pockets when they get older and go to work.
And because virtual learning is closer to no learning for many lower-income households — due, for example, to less reliable internet access, home environments less conducive to studying, and parents whose jobs make it harder for them to stay at home and monitor schooling activity throughout the day — keeping schools closed this fall would likely reduce the future earnings of today’s poorer kids the most.
The economic damage from so many young people receiving an inadequate education adds up. A World Bank economics working paper notes that in mid-April, 192 countries had closed all schools and universities, affecting 1.5 billion youths, or 90% of the world’s learners. To estimate the global economic effects of the shutdown, the authors assumed a four-month closure and, conservatively, that only 10% of students suffer learning loss from virtual learning. They found that future global output and incomes will be trillions of dollars lower due to the shutdown, with a loss equivalent to 15% of future GDP. If schools are closed for another four months this fall, the losses will grow much larger.
Parents’ economic outcomes will suffer if schools are closed in the fall, as well. If schools don’t reopen, some parents, including many low-income parents, will have to decide between facilitating home learning for their kids and going to work at all. Parents who can continue to work remotely will effectively be on a part-time schedule. Many employers are going to be less and less forgiving of the need to juggle parenting and work.
To some degree, the negative effects of working from home while looking after kids are cumulative. This spring, many parents were in survival mode, doing what needed to be done — and only that — each day. But if four months of virtual working and virtual learning happening under the same roof turns into 10, a cohort of parents of young kids in their prime working years will increasingly miss out on the opportunity do longer-term, deeper, creative work. This will hurt their careers. It will hurt the overall economy as well, as around one-quarter of workers have a child under the age of 13.
The U.S. is stumbling through the pandemic. When it comes to reopening schools, the absence of strategic thinking on a nationwide scale is on stark display. The plan is to have an open economy but return to virtual learning? You can’t have the former if you have the latter. This wishful thinking is destructive.
The U.S. should be prioritizing what is most important to society. At the top of the list should be children’s futures and current livelihoods. Socializing in bars should be at the bottom of the list. And yet the decisions of mayors and governors to allow frivolities means that the U.S. will have to cut back where it hurts the most, not the least.
Measures should be taken to protect teachers and students when schools reopen. But even with those measures, open schools would likely increase the transmission rate of the virus, so other steps should be taken to slow the spread. Washington should be providing leadership and guidance to local schools districts on how to reopen, along with funding to help them do so safely.
Whether schools reopen this fall is a test of the U.S.’s seriousness as a nation. This is one test that children are counting on adults to pass.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Michael R. Strain is a Bloomberg Opinion columnist. He is director of economic policy studies and Arthur F. Burns Scholar in Political Economy at the American Enterprise Institute. He is the author of “The American Dream Is Not Dead: (But Populism Could Kill It).”
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