$28 trillion: The toll of COVID-19 on students’ lifetime earnings

Stanford economist Eric Hanushek has predicted that academic setbacks during COVID-19 could cost each impacted student $70,000 over the course of their careers, or roughly $28 trillion total, reports The 74. “And it could be permanent if schools don’t do something about those diminished skills.”

The $28-trillion impact is an estimate based on devastating eighth-grade math performance on the 2022 National Assessment of Educational Progress (NAEP). Recent data has shown how academic achievement can help predict future economic success.

“…[T]he U.S. rewards economic skills more than almost any other country on earth” but also “punishes the lack of skills more than almost any other country on earth,” says Hanushek in an interview with The 74’s Kevin Mahnken.

“The cohort that suffered these learning losses isn’t going to be around for much longer. We’re graduating 3.5 million of them each year, and they’re going away without any real chance of recovery.”

…[E]verybody who was in school during the pandemic will experience 5-6 percent lower lifetime earnings. It’s almost like a 5 or 6 percent added tax, with this cohort earning less than the cohorts immediately ahead of it and immediately behind it, because they’re just less skilled. Unless we do something about it.

So, what do we do?

It needs to be more than just adding on to what we are currently doing, Hanushek continues. Lengthening the school day, lengthening the school year, doing tutoring here and there, and even reducing class size won’t, according to Hanushek’s analysis of data, “make up for the kinds of losses that kids have suffered. It’s just not a strong enough treatment.” And getting buy-in to make it mandatory that people stay longer in school is a challenge, Hanushek points out.

Instead, Hanushek recommends utilizing our most effective teachers by giving them incentives to take on a few more kids. “You can, in fact, provide incentives from the existing ESSER money — which will be around for at least another year — and provide them with help in grading, essentially lighten the load and make it possible for them to teach more kids.”

And the ineffective teachers? “If we could take some of the ESSER money and buy out the contracts of our least effective teachers, the combination of those things could be enough to make up for the learning loss we’ve seen,” according to Hanushek.

He admits this part of his idea is usually where people stop listening, but notes that “we can’t wait to hire and train a new group of teachers, or wait to figure out which kinds of instruction might help them the most. We just don’t have the time.”

But my point is that our current workforce is good enough to make up for this! We have, on average, a really good teaching force, though we don’t use the most effective teachers enough, and we overuse the least effective teachers.

Reforming teacher tenure so that teacher effectiveness is considered in tenure decisions could also help with this. Additionally, making changes to how teachers are paid could help ensure the best teachers are in the classrooms.

Under a traditional salary schedule, based on strict union pay scales, there is less opportunity to pay teachers based on effectiveness. “…[I]f you pay all teachers the same amount, you’re likely to get either very underpaid math teachers or very overpaid PE teachers; you tend to see the former, and that’s where some teacher shortages come from,” according to Hanushek.

As I shared here, an analysis of the pay reform introduced in the Dallas school district about a decade ago found that replacing the rigid teachers’ union salary schedule with a salary scale based on evaluation scores increased math and reading achievement by statistically significant standard deviations. “This is a policy that has been shown to work, and work at scale where you can turn around entire schools,” notes Hanushek.

“Someday I hope the teachers’ unions also see that it’s in their interest to make some marginal changes to the old ‘no differentiation’ policy.”