January 2022
Remi Jedwab (George Washington University)
Roberto Samaniego (George Washington University)
Paul Romer (NYU Stern)
Asif M. Islam (World Bank)
Abstract: Pandemic shocks disrupt human capital accumulation through schooling and work experience. This study quantifies the long-term economic impact of these disruptions in the case of COVID-19, focusing on countries at different levels of development and using returns to education and experience by college status that are globally estimated using 1,084 household surveys across 145 countries. The results show that both lost schooling and experience contribute to significant losses in global learning and output. Developed countries incur greater losses than developing countries, because they have more schooling to start with and higher returns to experience. The returns to education and experience are also separately estimated for men and women, to explore the differential effects by gender of the COVID-19 pandemic. Surprisingly, while we uncover gender differences in returns to education and schooling, gender differences in the impact of COVID-19 are small and short-lived, with a loss in female relative income of only $2.5$ percent or less mainly due to the greater severity of the employment shock on impact. These findings might challenge some of the ongoing narratives in policy circles. The methodology employed in this study is easily implementable for future pandemics.
JEL Codes: O11; O12; O15; E24; J11; J16; J17; J31
Key Words: Pandemics; Human Capital; Returns to Education; Returns to Experience; Gender; Female Relative Income; Labor Markets; Development Accounting; COVID-19
