Stupid children – Newspaper Kommersant No. 209 (7410) dated 11/11/2022

Economists at the Munich-based ifo Institute, comparing world data on the results of school education, for the first time gave an estimate “from below” of the scale of economic losses due to the poor quality of mass education. According to their calculations, by the end of the century the world will lose at least 11.4% of GDP due to the lack of basic intellectual skills in children, which secondary school cannot provide on average 62% of students. The paper also provides the first estimates of the long-term consequences of the global school lockdowns of 2020–2021, which are small relative to the overall scale of the problem.

Ifo Institute economists Sarah Gust and Luger Wessmann, co-authored with Stanford’s Eric Ganuszek, published a preprint titled “Global Universal Basic Skills: Their Current Scarcity and Impact on Global Development” in the NBER series. The 2020 study consolidates data on “Universal Basic Skills” (BSE), the minimum required for children to be economically competitive in the future.

This term implicitly refers to the popular concept of “universal basic income”, as if hinting that the transformation of the world labor market in the spirit of this concept must be supported by the corresponding productivity of workers. The formal goal of the work is to estimate the lower limit of the potential losses of world GDP in the coming decades from the entry into work of people who do not have the DEA. The authors combine data from international testing of schoolchildren PISA and TIMSS, regional tests TERCE / SERCE, SACMEQ and PASEC, subnational testing by government agencies in India and China. The key parameter is the results of the “first level” of the PISA and PISA-D tests, which describe the basic literacy (reading, writing, understanding of the text, instructions, minimum criteria for further learning) of schoolchildren, allowing them to work in a modern enterprise. The authors obtained approximate data for countries with 98.1% of the world’s population, generating 99.4% of global GDP – this is an almost ideal coverage and base for estimates “from below”, since, as a rule, the vast majority of schoolchildren are not covered by skills testing like PISA.

The results of the study may seem shocking, although the very estimate of the underutilized potential of world GDP by the end of the 21st century does not seem huge in this aspect – it is 11.4%, or about $ 700 trillion of unproduced value added. The “stylized facts” about what gives the world the spread of primary and secondary education are as follows. At least two-thirds of young people in the world do not have the DEA – they will either remain uncompetitive in the context of the global economy (which, we note, will not prevent them from being competitive in the closed parts of national economies), or they need to be “trained” before gaining the DEA.

In 101 countries out of 159 surveyed, more than half of the children did not receive basic skills, in 36 countries – more than 90%. A quarter of children in high-income countries do not master the DEA (24% in North America and 24% in the Russian Federation). The world leader in this indicator is Hong Kong, only 11% have no DEA, and the countries of North Africa are outsiders (89%). It is not a matter of school enrollment as such: although a large proportion of the population of children unable to work in the modern economy is made up of non-secondary education students, 62% of secondary school students do not acquire the skills for a minimum of competitiveness.

This sobering knowledge about the results of the widest spread of secondary education in the world, apparently, should not be underestimated: the results of previous historical eras were obviously significantly worse, including at the time of the global “technological revolution” and the preparation of the basis for a modern post-industrial economy in developed countries in 1950–1970. The text by Gust, Wessmann, and Hanushek concludes with an assessment of the “significant” change in the situation in the 2020-2021 pandemic, data on which were not included in the work. However, based on the “pre-Covid” data, the changes cannot be huge, the authors only state that COVID-19 and school lockdowns, first of all, reduced the possibility of receiving the DEA for children from the poorest households, not only in developing countries, but also in developed ones. However, the literature of recent months has not yet provided an estimate (which would have looked cynical, but legitimate) of alternatively calculated GDP losses from “coronavirus” deaths of school personnel in the hypothetical case of a global refusal to close schools in 2020-2021 (recall, children are much less than adults get sick with COVID-19). The scenarios of Gust, Wessmann and Hanushek on the further development of the situation with education in the world show that the share of those who have mastered the UBN at school in the world should not change radically in the coming decades, especially given the extreme conservatism of secondary education in the world.

Dmitry Butrin