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New IDEA study: The gap in in-person teaching caused by the pandemic will cost the Czech economy staggering sums of money in the future

8 April, 2021

The learning setback caused by the closing of schools during the COVID-19 pandemic will cost the Czech economy hundreds of billions in the future due to decreased labour productivity, a new study by economists from the think-tank IDEA at CERGE-EI suggests.

The price tag will be around CZK 66 billion per week of school closure and CZK 33 billion per week of remote teaching.

While losses incurred due to restrictions imposed in areas related to consumption and expenditure are clearly visible and can be relatively easily calculated, the real cost of the gap in in-person teaching will impact the economy only in the distant future when the present-day pupils and students become earners. The postponed impact of the learning gap leads many to think that closing schools is a relatively affordable way of flattening the pandemic curve.

"The shortsighted measures currently in place in the Czech Republic will end up costing us massive amounts of money. The gap in in-person teaching will negatively impact the earnings of today’s pupils and students for long decades,"  said Daniel Münich, executive director of the think-tank IDEA at CERGE-EI and co-author of the study.

The study estimates the impact of one week of complete school closure to 50 billion CZK on the side of the pupils and students and a further 16 billion CZK in lost future income to public budgets from employees’ insurance contributions, in total 66 billion CZK lost per week of school closure.

Czech schools began to use distance learning on an unprecedented scale during the pandemic, but even in the optimistic case where distance learning can replace 50% of in-person teaching on average, the loss still amounts to 33 billion CZK per week.

Next to decreased effectiveness, the gap in in-person teaching further compromises the capacity of the Czech education system to mitigate the impact of socio-economic disparities between advantaged and disadvanted students. "While students who have the advantage of a solid socio-economic and technological background continue learning remotely, albeit at a slower pace, disadvantaged students, by contrast, begin to forget even what they already knew. This learning loss will lead to a further deepening of an already significant knowledge divide," said co-author of the study Lucie Zapletalová.

The total loss represented by a closure lasting half a school year amounts to 660 billion CZK, which is more, for example, than the annual state budget expenditures on pensions. "Governments should take these estimates of expected losses into account when applying various measures during different phases of the pandemic and considering their costs, whether these measures relate to schools and the provision of in-person teaching directly, or affect life outside school," recommends Ole Jann, the third co-author of the study.

The gap of in-person teaching during the Covid-19 pandemic: estimation of invisible economic losses
Ole Jann, Daniel Münich, Lucie Zapletalová
Prague 2021

Full text of the study: https://idea.cerge-ei.cz/zpravy/cena-vyluky-prezencni-vyuky-behem-pandemie-covid-19 (in Czech)

The study is accompanied by an online calculator of estimated financial losses: https://ideaapps.cerge-ei.cz/covid_kalkulacka/ (in Czech)