The costs of growing up during the pandemic

Crises define generations. It will be no different for the young people who are experiencing today’s pandemic – the cost of which for them, in mental, educational and labour terms, has reached $1.7 trillion globally – some 2% of global GDP. This generation will be scarred for life.

Many baby boomers remember the assassination of President John F. Kennedy, the ‘Summer of Love’ or where they were on September 11, 2001. In the same way, the young generation being affected by the coronavirus today will remember it in similar terms tomorrow. COVID-19 is scarring their lives – not only because of the death they are witnessing of distant and close family members or the strain caused by school closures, but because of the economic crisis it has caused as well.

For this young generation (known as Generation Z), which is still in school or just finishing college, this is their first major global event, so they lack a benchmark for how to respond or move forward in the way that older generations often do.

Baby boomers, born in an era of post-war optimism, have experienced many challenges over the years. They have survived wars, social change, political upheaval, and more. This might be why they are often seen as less worried about the pandemic than their children and grandchildren think that they should be. It is also because they have had time to accumulate wealth.

“War-like” trauma

The COVID-19 pandemic could go down in history as a war of sorts and is already being considered a ‘period event’ - which demographers use to help define generations.

According to UN data, school closures have affected 1.6 billion young people worldwide and significantly changed how they live and study.

Learning at school is not only about what takes place in the classroom. It also involves social gatherings which are an essential part of childhood development and can later influence socialization. One can therefore expect a decline in social skills among the younger generation as a consequence of the pandemic. There is no doubt that COVID-19 is causing additional stress, anxiety and loneliness, which not everyone can handle on their own.

As a result, a significant increase in demand for psychological care should be expected, especially when we take into account the critical role social interaction plays in social development. According to our estimates, the pandemic has increased mental health costs by $407 billion over the last year.

Long-term scarring

According to the World Health Organization, older adults over the age of 60 are at the greatest risk of developing more severe complications due to COVID-19. But apart from its direct impact on human biology, which disproportionately impacts the older generation, the virus also has the potential to create a generation of socially awkward, insecure, and unemployable young people.

According to the International Labour Organization, more than one in six people between the ages of 18 and 29 has stopped working since the start of the pandemic. Furthermore, those who have not lost their jobs have nonetheless seen their working hours fall by 23%.

For the generation that came of age in the aftermath of the 2008 financial crisis, this is a particularly heavy blow.

Now, just over ten years later, they face an even tougher road ahead, with an economy in lockdown and a severely disrupted job market, with no real end to the uncertainty in sight. This younger generation faces even larger hurdles in the job market than their older counterparts: low-paid and temporary employment in those sectors most severely affected by the crisis (restaurants, hotels, the gig economy, etc…) are jobs more often held by young people. According to the OECD, 35% of young people (aged 15–29) across OECD countries work in low-paid and insecure jobs, on average, compared to 15% for those aged 30–50 and 16% in the 51+ age groups, making younger people more vulnerable to job loss and driving up youth unemployment rates across the globe. This increase in youth unemployment has created a global economic cost of $1.3 trillion in lost earnings.

The pandemic is undoubtedly one of the biggest human capital crises in the world, reversing gains in human capital outcomes by exposing weaknesses in health, education, and labor market systems. In this context, the World Bank’s Human Capital Initiative, started just before the pandemic, can be viewed as a powerful weapon in helping us understand – and ultimately combat – the negative economic consequences of this pandemic. To address this “war-like” trauma, we need to work together and share best practices so that we do not prolong this crisis for the world’s youth.  

Many young employees could face long-term, professional consequences, including beginning their careers lower on the job ladder and taking salaries lower than they might have expected in the early 2000s. This generation is truly unlucky to be entering the job market during a global recession. However, if we – the older generation – take heed and include this generation into our recovery efforts, we may just be able to infuse some luck into their future to overcome the bad breaks of the present.