School closures could cost the economy £350bn, IFS warns

The continued closure of schools could cost the UK economy up to £350bn in the long run, according to a new analysis.

The analysis by the Institute for Fiscal Studies (IFS) examines the potential long-run costs of lost schooling.

It estimates that by February half-term, children across the UK will have lost at least half a year of normal, in person schooling.

This would increase to two thirds of a year if schools weren’t to reopen as normal until Easter.

Early evidence by the IFS suggests if schools remain shut it would cost the UK economy £350bn in lost in earnings.

Even if the efforts by schools, teachers, children, parents and charities were able to mitigate 75% of this effect, the total loss would still be £90bn.

The IFS adds that much of this loss will be borne by children from lower-income families, resulting in a likely rise in inequality over the long-run

‘A loss of over half a year of normal schooling is likely to have far-reaching long-run consequences,’ said IFS research fellow, Luke Sibieta.

‘We will all be less productive, poorer, have less money to spend on public services, more unequal and we may be less happy and healthy as a result.

‘Standard evidence on the returns to schooling would imply a total loss of £350bn, or £90bn under incredibly optimistic assumptions. The inescapable conclusion is that lost learning represents a gigantic long-term risk for future prosperity, the public finances, the future path of inequality and well-being,’ added Mr Sibieta.

‘We therefore need a policy response that is appropriate to the scale of the problem. One useful benchmark is the £30bn it normally costs for half a year of schooling in the UK. That doesn’t mean we need to spend that much. But is does strongly suggest that the £1.5 billion allocated across the UK so far doesn’t even start to match the scale of the challenge. A much larger policy response would allow us to consider radical and properly resourced ways to help pupils catch-up.’

Photo Credit – MChe Lee