Lockdown impact on children risks damaging productivity for decades, says OECD


Szu Ping Chan
Mon, 5 February 2024 

Pandemic School Closures

Lockdowns threaten to wipe £700bn off the global economy and stunt growth for decades because of the lasting impact of school closures on young people, according to the Organisation for Economic Co-operation and Development (OECD).

The Paris-based organisation said a marked deterioration in basic reading and writing skills among 15-year olds since 2018 would damage the earnings potential of a generation of school leavers for most of their working lives.

The OECD said this could drag down economic growth for much of this century, warning in its latest economic outlook that this could have a “persisting negative impact on the level of productivity over the next 30 to 40 years”.

Clare Lombardelli, the OECD’s chief economist, estimated the recent decline in educational performance will “reduce the size of G20 advanced economies by at least 1pc at the point when these students are having their maximum impact as workers.”

With the total size of the global economy estimated at $105 trillion in 2022 (£85 trillion) in cash terms by the International Monetary Fund (IMF) and G20 economies including China and the US currently estimated to account for 85pc of this, it suggests more than £700bn could be wiped off the global economy in the long term.

Ms Lombardelli added: “This will last for decades to come.”

Referring to work published by the OECD last year, the former chief economic adviser to the UK Treasury added the reduction in growth was probably a “minimum” estimate with “greater impacts beyond this”.

She said: “There are many wider positive impacts of education not captured in this analysis such as the positive impact of education on health. It does not capture increasing technology which we know makes education and skills even more important and so the effects will likely be greater.”

The warning comes just months after the OECD warned that post-pandemic maths and science test scores among British pupils had fallen to the lowest level since records began in 2006, while reading proficiency has fallen to a level last seen in 2009.

The results of the internationally-respected research, known as the Programme for International Student Assessment (PISA), was described in its latest economic outlook on Monday as “particularly concerning” for global growth prospects.

The OECD added: “School closures during the pandemic may have contributed to the recent drop in test scores, particularly for disadvantaged students who were unable to benefit fully from online teaching.”

The organisation urged countries to invest more in teaching quality and teachers’ qualifications as it highlighted a longer term decline in educational attainment.

Productivity growth is crucial for rising living standards because wages can only sustainably rise faster than prices when workers generate more output.

The OECD’s stark warning came as it urged countries around the world to do more to support disadvantaged students as well as expanding vocational education and lifelong learning as technological advances threaten to destroy more jobs.

It also warned that inflation was likely to remain higher and more stubborn in the UK than in any other major advanced economy.

The OECD predicts inflation will remain the highest in the G7 for the next two years, despite a big drop in energy costs that is predicted to push the headline rate to 2pc within months.

Its latest forecasts showed prices, as measured by the consumer prices index were likely to average 2.8pc this year and 2.4pc next year – higher than any other rich large nation.

It left its predictions for UK growth unchanged at 0.7pc this year and 1.2pc in 2025, which is far weaker than growth rates seen before the financial crisis.

The Bank of England warned last week that the drop to 2pc by spring was likely to be temporary, with inflation not returning sustainably to its 2pc target until the end of 2026.

The OECD said interest rates globally were likely to remain higher for longer, even as it said the US could probably start to lower interest rates by June.

The World Bank has previously warned that today’s students could lose up to 10pc of their future earnings due to lockdown-induced education shocks.

It warned in a report last year that “the cognitive deficit in today’s toddlers could translate into a 25pc decline in earnings when these children are adults.”