The lasting scars of education losses in Latin America and the Caribbean

COVID-19 will leave undeniable lasting consequences for generations as a core component of national strategies to contain the spread of the virus was to close schools temporarily. The interruption was not minor: on average, Latin American schools remained closed for almost one year and a half. There is great concern over the future economic cost of these closures. 

The crisis generated significant learning losses, which, if not remediated, will also cause a spike in dropout rates. In both cases, the result is a dramatic break in human capital formation that severely affects skill acquisition for those who remained in the system. As a result, children affected by the pandemic are likely to enter adult life with fewer skills than they would have otherwise, and consequently, they will have lower expected lifetime earnings.

Both global projection models and empirical studies have estimated that societies’ economic costs from these learning losses can be enormous. But is this loss enough to affect students’ poverty status over the long term? 

A recent World Bank study, The impact of COVID-19 on education in Latin America: long-run implications on poverty and inequality, gives us insight into this question using the SEDLAC database. The report depicts a dire situation for the future.

The COVID-19 pandemic may imply a substantial increase in income poverty in the future for the cohort hit by the shock. In 2045, the projected impact would be a 1.7pp increase in the poverty rate ($6.85 poverty line/2017 PPP). Extrapolated to the entire Latin America and the Caribbean (LAC) population between 30-45 years old, when young people affected by the pandemic would be approximately in their prime age for the labor market, almost 5M people would fall into poverty if no compensation measures (switching to online classes, equipping students with laptops, parents’ time invested in schooling, etc.) had been implemented by parents, governments or both.

Patterns of poverty incidence over time after the pandemic 

Even in the most optimistic scenario, in which these measures were fully put in place, the increase in poverty would still be around 0.7pp. The impact would be even harsher for those who dropped out of school – with an estimated increase in poverty of more than 10pp.

More importantly, the study also shows that the negative effect of poverty would last for a very long time and would only be fully absorbed when the generation that was hit the most starts to retire. 

Overall, the relevant policy lesson here, which is consistent with previous studies, is: strict school closures, which were instituted to contain COVID-19 transmission, led to substantial welfare losses, and so now the necessary policy efforts to bring the situation back on track are enormous and need to be sustained over a long time.

This is an important lesson for designing an optimal policy response to this type of shock in the future. Education policies for the post-COVID age would need to focus on reducing these learning deficits, including interventions such as after-school remediation programs.

In LAC, the post-COVID education agenda would also need renewed commitments to reintegrate all children that abandoned school; recover the socio-emotional well-being of children; and value, support, and train teachers.

Social protection systems would also need to be fundamentally reformed to become more adaptive and increase coverage, responsiveness, interoperability, and use of data to respond better to shocks. The recently approved Fund for Pandemic Prevention, Preparedness and Response is an important tool to support countries considering these policy responses.

The authors appreciate the guidance from Emanuela Di Gropello, Practice Leader for Education in Latin America and the Caribbean.