Earlier this month, the UK announced a four week lockdown shutting down all including pubs, restaurants, non-essential shops but with schools, colleges and universities allowed to stay open. However, in India, with the festive season in full swing, most markets are swarming with people shopping and pubs and restaurants in some parts of the country packed to the rafters, there are still no signs of schools and colleges opening. This piece in the Mint refers to studies showing the long term impact of keeping kids away from school. “Past calamities show shutting schools for long can reduce children’s earnings throughout their life. India’s pre-existing disparities in resources and learning outcomes mean that some will bear the brunt much more than others”
“Eight months have passed since most Indian children last went to school, and their loss isn’t just restricted to learning outcomes. Research suggests that for most children, learning less will also mean earning less for an entire lifetime.
A World Bank research paper published earlier this year suggests that with schools shut, South Asian children of 2020 will be poorer by an average $5,813 by the time they wrap up work life. They will earn $319 less per year, costing the region over $800 billion over time. India will bear more than half of that loss.
Another estimate, by the Organisation for Economic Co-operation and Development (OECD) pegs India’s loss in this century at $12.5 trillion because of students’ lost learning time.
This is not without precedent. If not for the impact of World War II on students’ learning, Austria and Germany could have a 0.8% extra GDP during the 1980s, according to a 2004 research paper.
A study from teacher strikes in Argentina in the 1980s found that three months of missed classes reduced students’ annual earnings by up to 3% when they were in their 30s.
When students miss school, they not only stop learning new things, but also forget what they had already learnt. So, when school resumes, they will have very little time to catch up. Even before the pandemic, the quality of education in South Asia was so poor that 12 years of school meant effective learning of just 6.2 years. This will further drop to 5.5 years, according to the World Bank estimates.
Given that the returns to education have been rising over time in India, lower learning will impact future earnings of school-children. The impact will be unequal. Wealthy parents and well-funded schools have helped many children see off the lockdown to a great extent. Those who already lacked the resources, and those who face biases, such as girls, have been thrown further behind.
Just 37% rural children had a smartphone at home when education nonprofit Pratham held its annual survey in 2018. This proportion jumped to 62% during the pandemic, shows Pratham’s latest survey of 52,227 rural households held in September.”
If you want to read our other published material, please visit https://marcellus.in/blog/
Note: the above material is neither investment research, nor financial advice. Marcellus does not seek payment for or business from this publication in any shape or form. Marcellus Investment Managers is regulated by the Securities and Exchange Board of India as a provider of Portfolio Management Services. Marcellus Investment Managers is also regulated in the United States as an Investment Advisor.
Copyright © 2022 Marcellus Investment Managers Pvt Ltd, All rights reserved.