Loss-of-Learning and the Post-Covid Recovery in Low-Income Countries

Edward Buffie, Christopher Adam, Luis-Felipe Zanna and Kangni Kpodar

No 2022/025, IMF Working Papers from International Monetary Fund

Abstract: We analyze the medium-term macroeconomic impact of the Covid-19 pandemic and associated lock-down measures on low-income countries. We focus on the impact over the medium-run of the degradation of health and human capital caused by the pandemic and its aftermath, exploring the trade-offs between rebuilding human capital and the recovery of livelihoods and macroeconomic sustainability. A dynamic general equilibrium model is calibrated to reflect the structural characteristics of vulnerable low-income countries and to replicate key dimensions of the Covid-19 shock. We show that absent significant and sustained external financing, the persistence of loss-of-learning effects on labor productivity is likely to make the post-Covid recovery more attenuated and more expensive than many contemporary analyses suggest.

Keywords: Covid-19; Public Investment; Growth; Debt; Fiscal Policy Human Capital; Labor Markets; Welfare; Covid recovery; IMF working paper Institute; baseline calibration; loss-of-learning effect; wage curve; internal rate of return; production function; COVID-19; Human capital; Wages; Global (search for similar items in EconPapers)
Pages: 60
Date: 2022-02-04
New Economics Papers: this item is included in nep-dge, nep-hea and nep-mac
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Journal Article: Loss-of-learning and the post-Covid recovery in low-income countries (2023)
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