The extended closure of schools amid the COVID-19 pandemic could dent India’s future earnings by anywhere between $420 billion and $600 billion, as depleted learning levels of students will translate into poorer productivity going forward, the World Bank has said.
Warning that as many as 5.5 million students could drop out of schools across South Asia, the bank has said dropouts, combined with substantial learning losses for those who remain enrolled in schools, would cost South Asia as much as $622 billion in future earnings and gross domestic product.
This figure could climb further to $880 billion, as per a more pessimistic scenario envisaged by the bank on the lifetime impact of school closures on the productivity of this generation of students.
South Asian governments spend only $400 billion a year on primary and secondary education, so the total loss in economic output would be substantially higher, the bank highlighted.
“While the regional loss is largely driven by India, all countries will lose substantial shares of their GDP … The average child in South Asia may lose $4,400 in lifetime earnings once having entered the labour market, equivalent to 5% of total earnings,” the World Bank said in its latest South Asia report titled “Beaten or broken: Informality and COVID-19”.
The report has flagged “far-reaching consequences” of lockdowns, apart from the obvious damage to businesses, consumption patterns and imposed social hardship on poor and vulnerable households, especially urban migrants and informal workers.
“Education came to a standstill and efforts to teach children during school closures proved challenging. The estimated costs of the school closures in terms of learning and earning losses are substantial … They have kept 391 million students out of school in primary and secondary education, further complicating efforts to resolve the learning crisis,” it said.
Remote learning tough
“Children have been out of school for approximately five months. Being out of school for that long means that children not only stop learning new things, they also forget some of what they have learned,” the bank said.
It added that engaging children through remote learning programmes had been difficult, despite most governments’ best efforts to mitigate the impact of school closures.
The projected learning loss for the region is 0.5 years of learning-adjusted years of schooling at present, and this will already lead to substantial future earning losses, the bank estimated.
Labour productivity will also take a greater hit from COVID-19 than most previous natural disasters, not just due to the disruptions in training and education.
“First, the increased integration of the global economy will amplify the adverse impact of COVID-19. Second, contagion prevention and physical distancing may render some activities, for example the hospitality sector, unviable unless they are radically transformed, which will take time. Even in less directly affected sectors such as manufacturing, banking and business, severe capacity underutilisation lowers total factor productivity while restrictions to stem the spread of the pandemic remain in place. Finally, disruptions to training, schooling and other education in the event of severe income losses, even once restrictions are lifted, will also lower human capital and labour productivity over the long term,” the report concluded.