Students have already been saddled with economic losses from school closures

Nobody is talking about schools resuming completely to normal this fall, but the economic problems caused by the pandemic would not be solved even if they did. In an analysis that we authored and that was discussed last weekend by education ministers of the G-20, we find the cohort of K-12 students hit by the spring closures has been seriously harmed and already faces a loss of lifetime income of 3 percent or more. The nation also faces a bleaker future.

The school closures had highly variable impacts on student learning. Some schools found ways to pivot to home-based learning. Some parents found ways to substitute for the lessened role of schools. But there is no doubt that the average student has suffered learning losses and that these will follow the student throughout life.

Early estimates by a national testing firm indicate that this cohort of students had already accrued one-third to over a half year of learning losses. Even taking the optimistic view that the average loss was just one-third year and that schools on average immediately return to 2019 levels, these students can expect 3 percent lower earnings throughout their entire career.

The lower learning will almost certainly be more detrimental for students whose parents are less ready to step in and substitute for the teachers. Just closing the “digital divide” will not be sufficient to close the expanding achievement gap, because lower achieving students will need human help in adapting to new teaching modes. The widening spread in learning can be expected to lead to even wider income gaps than exist today.

Our recently released OECD study paints a depressing overall picture for the nation. These learning losses lower the skills of the future workforce. Even with the optimistic estimate of learning losses, GDP will be 1.5 percent less for the remainder of the century than would have been expected pre-COVID. The sum of lost GDP over the century would be an astounding $14 trillion in current dollar (present value) terms.   

As schools experiment with varying re-opening strategies, any quick return to prior levels of student academic performance seems unlikely. Added learning losses would simply compound the prior projections of the economic costs.

As the pandemic continues and as schools move to re-establish their programs, it is natural that considerable attention has focused on the mechanics and logistics of safe re-opening. Even so, the long-term economic impacts also require prompt attention. The losses already suffered will require more than the best of currently-considered re-opening approaches.

Just getting back to pre-COVID levels of performance won’t do: The already-booked learning losses will go away only if the schools get better than they were before. That is not impossible. Research points a way through the COVID thicket, a way that capitalizes on the pandemic-induced alterations in the traditional school. 

Schools are rapidly moving to new modes of instruction that include different doses of on-line work, asynchronous class presentations, and in-person instruction. Past research has shown highly variable effectiveness of teachers, and this variation is likely to be amplified with some teachers being more effective in-person and some being superior at on-line work. If schools moved to utilizing teachers where they were more effective, the improved instructional environment could lead to better performance of the schools, ameliorating the existing learning losses. For example, the superior on-line teachers could take on more students with this expansion, compensated for by more support or simply higher compensation.

Additionally, with the almost certain widening of learning differences within individual classes after re-opening, a move toward more individualized instruction would benefit students. Students would seek mastery of topics, and students within a classroom can be working on different goals. With such individualization, all can be better off.

Re-opening of schools is presenting new challenges. Regardless of the approach taken, the huge economic losses associated with lost learning must be addressed, and the best of the currently discussed re-opening models are insufficient to deal with the mounting learning deficits.

Eric A. Hanushek is a senior fellow at the Hoover Institution of Stanford University, and Ludger Woessmann is professor of economics at the University of Munich.  Their analysis was published today by the OECD.