Lockdowns will be a drag on the economy for 40 years thanks to their impact on students, OECD says

The economic impact of these decisions was severe and immediate, leading many world leaders, particularly in developed nations, to enact sweeping legislation to help their citizens through the tragedy and keep businesses alive. Central banks generally responded in kind, cutting interest rates to help prop up their ailing economies with cheap money.

No effort was spared to save Fortune 500 companies and small businesses from disaster during the pandemic-era lockdowns. But the kids weren’t so lucky. 

In the U.S. and around the world, school either went by the wayside entirely or became a digital-only experience, and with little time to prepare, many education systems struggled to produce results. In fact, according to the Organization for Economic Cooperation and Development (OECD), between 2018 and 2022, “there was an unprecedented drop in performance in many countries for 15-year-olds tested on reading and mathematics.” 

In its recently published interim economic outlook titled “Strengthening the Foundations for Growth,” the OECD warned this decline in test scores “could have a persisting negative impact on the level of productivity over the next 30-40 years.” 

Essentially, lower test scores today translate to less productive economies in the long run.

School closures

What’s to blame for the drop in test scores? The OECD said school closures during the pandemic were likely a major contributor, “particularly for disadvantaged students who were unable to benefit fully from on-line teaching.”

The idea that school closures hurt test scores has plenty of scientific backing. As researchers explained in a 2022 study published in the Journal of Global Health Reports, long-term absences from schools “not only caused worse learning outcomes that are causing intergenerational inequalities, but also induced multiple physical and mental health issues and even crises among students at all levels.”

The researchers, like the OECD, noted the issues were more severe in lower- and middle-income countries as well, because these countries didn’t have the resources to provide proper online education. This lower quality education on offer during the pandemic led students to lose motivation, resulting in a higher dropout rate, more frequent child marriages, and increased mental-health issues, the Journal of Global Health Reports’ study said. 

Did school closures just exacerbate the trend?

School closures definitely had an impact on students’ performance over the past few years, but the reality is the trend of declining performance didn’t start during the pandemic.

“The recent decline in performance continues a downward trend in test scores prior to 2018, pointing to longer-term issues in educational systems in some countries,” the OECD’s study said.

The intergovernmental organization with 38 member countries recommended governments worldwide swiftly “act to improve education and skills outcomes” by increasing teaching quality; using resources to help disadvantaged students; and expanding vocational education opportunities.

The OECD also argued universities and vocational schools need to do a better job considering the needs of the labor market when creating curriculum. “Such reforms will involve some additional fiscal costs – reinforcing the challenges governments face – but raising the quality of spending will be as important,” it concluded.