The Long-Term Distributional and Welfare E?ects of Covid-19 School Closures

Nicola Fuchs-Schundeln, Dirk Krueger, Alexander Ludwig and Irina Popova
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Nicola Fuchs-Schundeln: Goethe Universitat Frankfurt and CEPR
Irina Popova: Goethe Universitat Frankfurt

PIER Working Paper Archive from Penn Institute for Economic Research, Department of Economics, University of Pennsylvania

Abstract: Using a structural life-cycle model, we quantify the long-term impact of school closures during the Corona crisis on children a?ected at di?erent ages and coming from households with di?erent 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 di?erent 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 ?nd that parental reactions reduce the negative impact of the school closures, but do not fully o?set 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.

Keywords: Covid-19; school closures; inequality; intergenerational persistence (search for similar items in EconPapers)
JEL-codes: D15 D31 E24 I24 (search for similar items in EconPapers)
Pages: 54 pages
Date: 2020-08-26
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Related works:
Journal Article: The Long-Term Distributional and Welfare Effects of Covid-19 School Closures (2022)
Working Paper: The long-term distributional and welfare effects of Covid-19 school closures (2021)
Working Paper: The Long-Term Distributional and Welfare Effects of Covid-19 School Closures (2020)
Working Paper: The Long-Term Distributional and Welfare Effects of COVID-19 School Closures (2020)
Working Paper: The Long-Term Distributional and Welfare Effects of Covid-19 School Closures (2020)
Working Paper: The long-term distributional and welfare effects of Covid-19 school closures (2020)
Working Paper: The long-term distributional and welfare effects of Covid-19 school closures (2020)
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