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COVID school closures may slightly stunt U.S. economic growth: Fed paper - Metro US

COVID school closures may slightly stunt U.S. economic growth: Fed paper

FILE PHOTO: Chicago teachers work remotely due to COVID-19 concerns

SAN FRANCISCO (Reuters) – U.S. school closures due to the COVID-19 pandemic may end up stunting U.S. economic growth over the long term by reducing the number of college-educated workers and increasing the number of high-school dropouts, according to a paper published Monday by the San Francisco Federal Reserve Bank.

The educational sector is a huge engine https://www.reuters.com/article/us-health-coronavirus-usa-schools-analys/u-s-public-schools-focus-of-debate-on-reopening-are-unsung-economic-force-idUSKCN24F2AZ of jobs for the U.S. economy, with a workforce of about 8 million Americans before the pandemic. Schools in large swaths of the United States are currently operating online, or only partially in-person. The new Biden administration has been pushing to return students to the classroom, noting the toll that school closures have taken on education and family life.

The San Francisco Fed paper sheds new light on the economic toll.

Its authors drew on a study published last year estimating that school closures could result in fewer children earning a bachelor’s degree, and as much as a 1 percentage point increase in the share of children not finishing high school.

With college-educated workers far out-earning those with less education, the projected decline in overall educational attainment could trim annual U.S. output by an average of a quarter of a percentage point over the next 70 years, the paper found.

The hit to GDP would peak in 2045, at just shy of $150 billion in that single year, the researchers estimated.

The closures may also contribute to income inequality because lower-income families likely have fewer resources to make up for lost learning than higher-income households, they wrote.

“Disruptions to children’s learning today can have a persistent and large impact on the production capacity of the economy and harm future growth,” wrote economists John Fernald, Huiyu Li, and Micthell Ochse. “The long-run effects of learning disruptions on the economy will depend crucially on how fast the economy recovers, which will impact how much lost education during the pandemic can be remediated.”

(Reporting by Ann Saphir; Editing by Alistair Bell)

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