Virus Disruption to Schools to Deliver $15 Trillion Hit to US Economy: OECD

Virus Disruption to Schools to Deliver $15 Trillion Hit to US Economy: OECD
High school students in line to have temperature checked before entering the building in Tampa, Fla., on Aug. 31, 2020. (Octavio Jones/Getty Images)
Tom Ozimek

An intergovernmental agency that works to stimulate economic development has warned that pandemic-related disruption to schools could cost America’s economy around $15 trillion in lost output over the rest of the century.

The Organization for Economic Cooperation and Development (OECD), which besides the United States includes 36 member countries, said in a Sept. 8 streamed press conference and accompanying report (pdf) that researchers found a significant “corona-induced loss of skills” as schools closed to curb the spread of the Chinese Communist Party (CCP) virus. The agency concluded that the pandemic-related interruption to education would, over the remainder of the century, cost the U.S. economy 1.5 percent of gross domestic product (GDP).
“The present value of the total cost would amount to 69 [percent] of current GDP for the typical country,” the authors of the report concluded. America’s GDP in 2019 was around $21.7 trillion, according to the Bureau of Economic Analysis.

The calculations, which are drawn from a pre-publication working paper by Hanushek E and Woessman L titled “The economic impacts of learning losses,” are based on long-run estimates of how students’ losing on one-third of the school year due to the virus outbreak would impact the economy. The agency warned, however, that if schools are slow to revert to previous levels of performance, the education-related detrimental effect of the pandemic on the economy could be even worse.

“These estimates assume that only the cohort currently in school are affected by the closures and that all subsequent cohorts resume normal schooling. If schools are slow to return to prior levels of performance, the growth losses will be proportionately higher,” the authors noted.

Besides the loss of skills due to outright school closures, the OECD said the pandemic may also affect public spending on education as funds are diverted into the health sector and to prop up ailing economies. The agency also said that, provided it can be done safely, reopening educational facilities will have a positive impact on economic output.

“Reopening schools and universities will bring unquestionable benefits to students and the wider economy. In addition, reopening schools will bring economic benefits to families by enabling some parents to return to work,” the authors wrote.

Another recommendation to minimize the impact on schooling includes expanding the remote learning infrastructure.

“Strengthening education systems needs to be at the heart of government planning to recover from this crisis and give young people the skills and competencies they need to succeed,” said OECD Secretary-General Angel Gurría, launching the report in Paris. “The current crisis has tested our ability to deal with large-scale disruptions. It is now up to us to build as its legacy a more resilient society,” Gurría added.

The agency also urged careful risk management as authorities reopen schools, including adopting such measures physical distancing in classrooms, staggering meal times to avoid large gatherings, and stressing good hygiene.