Economy & Politics

School dropouts will cost trillions of euros

Abandoned school could have a particularly noticeable impact in the long term - with economic damage running into billions
School closings could have a particularly noticeable impact in the long term – with economic damage running into billionsimago images / Michael Weber

Schools are the big point of contention in the partial lockdown. How contagious are children and young people really? Are there more infections in the classroom or during vacation? Should schools close a week before Christmas so that children are less likely to be infected and their grandparents are not infected with the corona virus? While politicians, virologists and teachers’ associations are racking their brains over these questions, economists have been warning about the corona pandemic since the beginning of the corona virus Follow-up costs of school closings.

It is becoming more and more evident that classroom instruction should actually have top priority. After all, missed lessons and poorer learning conditions not only reduce the income of school leavers, but also their productivity throughout their lives. School closings of a third of the school year could give Germany over 80 years 2.56 trillion. Education economist Ludger Wößmann from the Ifo Institute estimates that it will cost 1.3 percent of the future gross domestic product. By way of comparison: the budget deficit this year is said to be only EUR 218 billion.

Three percent less salary

The economic reasoning behind it goes as follows: With every year of additional education, a person gains additional skills, which later give him new ideas more often, with which he can invent things that increase technological progress or simply make him work faster. All of this increases overall economic productivity. Of course, employers also pay higher wages for this. A year of education brings an average of three percent more salary over the entire working life.

But will the students really be worse off in the long term after the Corona crisis? Past experience and initial studies during the pandemic suggest this.

Economists know from school strikes in other countries that school education still influences salaries decades later. Argentinian pupils, for whom elementary school lessons were canceled for an average of 88 days, got around three percent less salary between the ages of 30 and 40. A study of the two short school years in 1967 and 1968 in Germany, in which some students had nine months less lessons, even came to the conclusion that they earned around five percent less over their entire working life due to the shorter schooling.

Elementary school students learned almost nothing at home

One could argue that the children were able to study online this year and were not affected by school closings for so long. There are no exact numbers of how long the school was closed for students. But during the first lockdown, some schools were closed for months. In the last week of November, according to the latest figures from the Conference of Ministers of Education and Cultural Affairs, 12.8 percent of the schools were currently in restricted presence due to corona cases among students and teachers, 0.5 percent are completely closed.

What is certain is that teaching at home is nowhere near as good as teaching at school. This is proven by figures from the Netherlands. Primary schools there were closed for eight weeks in the middle of the year. Doctoral students Per Engzell, Arun Frey and Mark Verhagen from the University of Oxford examined the results of several standardized tests of Dutch elementary school students before and after school closings and compared the test success of the students with the results from previous years. The authors even emphasize that they examined a best-case scenario because, unlike other countries, the Netherlands already had a relatively good infrastructure for distance learning. Still, their results are worrying. “The average student has made little or no progress,” is the result of the scientists. In addition, the less well educated the parents were, the less the students learned.

If you look at how students spend their time outside of school, it is hardly surprising. Elisabeth Grewenig and her colleagues at the Ifo Institute conducted a survey of over 1,000 parents and asked them how their children spent their time before and after schools closed in spring. The result: During school closings, the students spent an average of 3.6 hours instead of 7.4 hours on schoolwork. Below-average students in particular played computer games more often and spent more time on social media.

Some things cannot be caught up

In order to keep the economic consequences as low as possible, students should catch up on the subject matter as quickly as possible. It is questionable whether this will succeed. “The children forget what they have learned. In the autumn, many teachers reported that they had to start again much earlier and have to go over a lot of things that had actually already been learned, ”says Wößmann.

This is also shown by an example from Belgium. In 1990 the government there decided to make education a state issue rather than a federal issue. The teachers in the poorer French-speaking part feared that they would not get the same wages in the future as their colleagues in the Flemish part of the country, so they went on strike. Between May and October 1990 school was canceled several times for up to six weeks in the French-speaking part of Belgium.

The teachers were later guaranteed the same two percent pay increase as the teachers in Flanders. But when the economists Michèle Belot and Dinand Webbink examined the consequences of the strike on the pupils 20 years later, they found that although the Walloon pupils had repeated classes more often and went to school for half a year longer, they probably didn’t catch up with the lack of knowledge on. Later they went to university less often and so took up jobs that made them less money.

It remains to be seen whether school closings and digital lessons will really have as high consequential costs for the economy as Wößmann estimates. But research so far shows that the crisis has set students back, especially the weak. This will damage the economy as a whole in the long term. The only thing that remains unclear is how much the damage will be exactly.

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