The Long-Term Distributional and Welfare Effects of Covid-19 School Closures / Nicola Fuchs-Schündeln, Dirk Krueger, Alexander Ludwig, Irina Popova.

Format:

Book

Author/Creator:

Fuchs-Schündeln, Nicola.

Contributor:

National Bureau of Economic Research.

Krueger, Dirk.

Ludwig, Alexander.

Popova, Irina.

Series:

Working Paper Series (National Bureau of Economic Research) no. w27773.

NBER working paper series no. w27773

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2020.

Summary:

Using a structural life-cycle model, we quantify the long-term impact of school closures during the Corona crisis on children affected at different ages and coming from households with different parental characteristics. In the model, public investment through schooling is combined with parental time and resource investments in the production of child human capital at different stages in the children's development process. We quantitatively characterize both the long-term earnings consequences on children from a Covid-19 induced loss of schooling, as well as the associated welfare losses. Due to self-productivity in the human capital production function, skill attainment at a younger stage of the life cycle raises skill attainment at later stages, and thus younger children are hurt more by the school closures than older children. We find that parental reactions reduce the negative impact of the school closures, but do not fully offset it. The negative impact of the crisis on children's welfare is especially severe for those with parents with low educational attainment and low assets. The school closures themselves are primarily responsible for the negative impact of the Covid-19 shock on the long-run welfare of the children, with the pandemic-induced income shock to parents playing a secondary role.

Notes:

Print version record

September 2020.