Covid-19 School Closures Will Reduce Children’s Income as Adults

Children who couldn’t attend school due to the pandemic are likely to suffer the consequences for years, including lower earnings partly because they finish their education earlier, according to a study published by VoxEU.

The paper uses a model to calculate that among children who couldn’t attend school early in life because of the pandemic, the share with a college degree slips 2.6% while the proportion of high-school dropouts rises 4.1%. They face a long-run average wage loss of 1%.

Children also suffered due to their parents’ loss of income during the coronavirus crisis, according to economists Nicola Fuchs-Schündeln, Dirk Krueger, Alexander Ludwig and Irina Popova. However, the inability to attend class accounted for 90% of their welfare loss.

“School and childcare closures are potentially very costly measures,” they wrote. There are “significant negative long-term consequences on the human capital and welfare of the affected children, especially those from disadvantaged socioeconomic backgrounds.”

Schools across Europe and the U.S. closed in response to the initial wave of the Covid-19 pandemic. While in many cases classes moved online to offset the damage, a University College London study found the a fifth of U.K. pupils did no schoolwork at home.

A number of European countries are in the middle of new restrictions to stem the spread of the virus this autumn, but this time schools have largely remained open.

“This reduction in human capital accumulation is likely slowing the long-run growth prospects of countries, especially those whose economies are relatively human capital intensive, such as the U.S. and Europe,” the authors said.

©2020 Bloomberg L.P.

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