The disruption of classes as a result of the Covid-19 pandemic could cause Brazil’s GDP to fall by as much as 23 percent, according to a study by Insper, a prestigious business and economics school in São Paulo. The study predicts that the lost academic year and premature market entry would result in a less skilled workforce entering a slow job market. Students could stand to lose up to BRL 42,500 (USD 8,417) in future income due to the knowledge gap.
The simulation takes into account the average added gain that completing each academic year has in a student’s income when entering the job market.
“We had the closing of schools and, even if we have some classes via remote learning, students are still not learning as they should. This was not planned, there was no transition for this new [virtual] model,” Insper’s Economist, and author of the study, Ricard Barros told the press. “The simulation considers that the job market will look at this generation and, instead of considering that they had 12 years of basic education, they will consider only 11, due to the knowledge that for one year they did not learn [properly].”
With 34.8 million students still undergoing basic education, the accumulated income loss of this generation would add up to a BRL 1.48 trillion loss to Brazil’s economy––23 percent of the country’s GDP.
Another simulation projects the impact of students staying in school an extra year to make up for lost classes. In this scenario, the delay in entering the job market would cause a much lower loss to Brazil’s economy of BRL 350 billion, around 5 percent of the country’s GDP. “The financial loss to these students and the country is so immense that it is not worth pretending it didn’t happen. We have to convince our youth that staying in school for another year is not a step backward in life,” Mr. Barros said.
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