Aggregate and Intergenerational Implications of School Closures: A Quantitative Assessment

Youngsoo Jang () and Minchul Yum

CRC TR 224 Discussion Paper Series from University of Bonn and University of Mannheim, Germany

Abstract: A majority of governments around the world unprecedentedly closed schools in response to the COVID-19 pandemic. This paper quantitatively investigates the macroeconomic and distributional consequences of school closures through intergenerational channels in the medium- and long-term. The model economy is a dynastic overlapping generations general equilibrium model in which schools, in the form of public education investments, complement parental investments in producing children's human capital. We calibrate the stationary equilibrium of the model to the U.S. economy and compute the equilibrium responses following unexpected school closure shocks. We find that school closures have moderate long-lasting adverse effects on macroeconomic aggregates such as output. In addition, we find that school closures reduce intergenerational mobility, especially among older children. Finally, we find that lower substitutability between public and parental investments induces larger damages in the aggregate economy and overall lifetime incomes of the affected children, while mitigating negative impacts on intergenerational mobility. In all findings, heterogeneous parental responses to school closures play a key role. Our results provide a quantitatively relevant dimension to consider for policymakers assessing potential costs of school closures.

Keywords: Intergenerational mobility; lifetime income; parental investments; aggregate loss; substitutability (search for similar items in EconPapers)
JEL-codes: E24 I24 J22 (search for similar items in EconPapers)
Pages: 47
Date: 2020-11
New Economics Papers: this item is included in nep-dge and nep-mac
References: Add references at CitEc
Citations: View citations in EconPapers (28)

Downloads: (external link)
https://www.crctr224.de/research/discussion-papers/archive/dp234 (application/pdf)

Related works:
Journal Article: Aggregate and Intergenerational Implications of School Closures: A Quantitative Assessment (2024)
Working Paper: Aggregate and Intergenerational Implications of School Closures: A Quantitative Assessment (2020)
Working Paper: Aggregate and Intergenerational Implications of School Closures: A Quantitative Assessment (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bon:boncrc:crctr224_2020_234v2

Access Statistics for this paper

More papers in CRC TR 224 Discussion Paper Series from University of Bonn and University of Mannheim, Germany Kaiserstr. 1, 53113 Bonn , Germany.
Bibliographic data for series maintained by CRC Office ().