The pandemic will cost pupils £40,000 in lost earnings over their lifetime.

This was the key finding of an Institute for Fiscal Studies (IFS) publication that hit the headlines this week, and no wonder: it offers a clear, financially orientated way to show the damage that lost learning will do to children long into the future.

Worse still, by multiplying this figure by the number of schoolchildren currently not in school across the UK - 8.7 million -the IFS says lost earnings for this generation will be “an astronomical £350 billion”.

All very eye-catching.

But how are such figures arrived at? Can we really know with such certainty how much the average pupil will lose in earnings over their lifetime as a result of something that happens when they are 8, 11 or 15 years old? And haven’t we been told that most of the jobs the next generation will have don’t even exist right now? If so, how can we know what they will earn - or won’t earn - with such certitude?

Coronavirus: The impact on pupils’ future earnings

It is worth, first of all, understanding where the £40,000 figure comes from.

The figure was produced by a research fellow at the IFS, Luke Sibieta, using a report from 2018 by the World Bank entitled Returns to investment in education: a decennial review of the global literature.

That report looked at a huge data set of trends and patterns gathered over 60 years on the financial benefits of time spent in school and higher education.

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Those researchers found that each year of schooling increases earnings by about 8 per cent a year - at least for those in advanced and high-income countries.

From this, if the average person is estimated to earn £1 million over a lifetime - which the IFS has previously calculated is about the norm in the UK - then a loss of 4 per cent (ie, half the 8 per cent that each year of education adds to earnings) equates to £40,000.

This is not just bad for individuals, but society as a whole, as lower earnings meanings lower taxation, creating a “severe” impact on public finances, writes Sibieta. 

“If 30 to 40 per cent of future lifetime earnings ends up as taxes, then lost earnings of £350 billion would mean over £100 billion less tax revenue over the long-run to spend on public services or paying down the debts we are currently accumulating.”

This is all slightly simplistic, as Sibieta acknowledges - “this is just an illustration, rather than a precise prediction” - and is based on the idea that remote teaching will have had no impact on learning, which is clearly a false premise.

However, although it is not possible to know the impact that remote teaching will have on learning now, even an optimistic model - that imagines 75 per cent of the impact of lost learning is mitigated by remote teaching - would still lead to losses for this generation of £90 billion, which equates to around £10,000 each over a lifetime. 

Some quick economy theory

But why will lost learning link so directly to lost earnings on such a generational level?

The gap in earnings may be obvious when carrying out a crude comparison between two students - one with a raft of stellar grades who goes to a top university, and one who leaves with no grades. But how can we predict that a whole generation will really go on to earn less over a lifetime?

In fact, could it not be argued that because every child will have suffered the same broad impact from the pandemic, the future labour market will balance itself out and effectively end up paying people what they would have been paid anyway?

Sibieta says this idea of how a labour market can operate is called “signalling” and is based on the idea that a qualification - say a GCSE or A level - has an inherent value to an organisation as a measure of ability.

In theory, therefore, as long as children have qualifications that employers value - even if achieved without sitting exams - their future prospects are no different because the skills they are deemed to have remain the same.

However, Sibieta says a more widely held view of the labour market is that a more skilled workforce - ie, one that has had more education - will lead to higher productivity and this, in turn, will lead to increased profitability, and therefore higher salaries - or, conversely, lower ones.

 “If you are less productive, you earn less,” he says, matter-of-factly.

Why catch-up matters

The point of all this, Sibieta says, is not to scaremonger but to underline the huge long-term impact that the pandemic will have for generations to come - and why we must fix it.

“The numbers give a sense of the scale of the problem and why it is important we have a policy that addresses this,” he tells Tes.

As a result, he says if the UK government is genuine about wanting to help pupils catch up then serious investment is needed. And he means serious - to the tune of £30 billion.

This figure is arrived at by calculating the cost of running schools across the UK for half a year:

• £25 billion in England
• £2.8 billion in Scotland
• £1.4 billion in Wales
• £1 billion in Northern Ireland. 

So far, what has been put forward in terms of catch-up funding is a drop in the ocean against what is needed, he adds.

“In total, governments across the UK have allocated about £1.5 billion towards catch-up. This is tiny in comparison with the scale of the problem.”

He also takes issue with the funding put forward for the National Tutoring Programme (NTP) arguing that while this is a solid approach, it is woefully underfunded.

“By my calculations, the £250 million in the schools component of the NTP can buy about six hours of tutoring time for each of 1.4 million disadvantaged students. That’s unlikely to be enough. 

“The amount of extra resources for catch-up should be far higher. To prevent inequalities from widening, the distribution also needs to be heavily skewed towards more disadvantaged pupils and/or pupils who have seen the biggest losses in educational progress.”

Learning lost in lockdown

What really compounds the problem is that lost learning also impacts on future learning - both in school and beyond - meaning that unless the catch-up provision really has ambition, we will never succeed in getting this generation of pupils to the level they would have been without the pandemic.

“The learning may be lost now in real terms but unless you have a proper catch-up model you are effectively lopping six months of learning off the end of pupils’ education,” Sibieta told Tes, citing new research from the Netherlands that has looked at this issue.

He acknowledges this may be less impactful on primary pupils who have more time to catch up over the remainder of their education - but, conversely, these pupils may have progressed the least while learning remotely and may have the furthest to go to catch up even over a longer timescale.

“Teaching remotely with a five- or six-year-old is clearly much harder than older pupils - although they [older pupils] are almost certainly the ones that will be hit hardest because they have precious little time left in school.”

Either way you cut it, it seems the future job prospects of even the youngest pupils will be hampered.

What are future jobs?

But then again…what will the future jobs market even look like?

We have heard numerous times that the future of work is unknown, that the next wave of jobs that pupils will do doesn’t exist yet, that automation will change everything. Can we really know the earning potential of pupils when the future is so vague?

Alastair Woods, people and organisation partner at PwC, says it is unquestionable that there will be major changes in the jobs market that will alter what skills will be needed in the future - including digital skills - and that this, in theory, could offset some of this lost learning.

“It’s clear that digital skills are in high demand now and that is unlikely to change. Young people today are increasingly well equipped in this respect,” he says.

However, he acknowledges that wider skills needed for any type of work -  such as collaboration, creativity, emotional intelligence - are also vital, and will need to be given focus, too, as part of any wider catch-up strategies.

“The goal is now to ensure that children can catch up on these classroom and broader interactions associated with being in school, such as teamwork and collaborative projects, so that the ability to meet the demands of future employers is not affected.”

Sibieta agrees and says that even if we don’t know what the future of work will be, it is vital children are taught as much as possible now to be prepared for any changes.

“We need to make sure we prepare children by giving them a broad set of skills - that will leave them far better placed to navigate the future labour market. A narrow base of skills leaves you very at risk to any future economic shocks,” he says.

Another view 

None of this is particularly great reading for teachers striving to do their best to educate pupils - not least because it looks at the value of education in purely economic terms (a debate for another time perhaps).

But let’s find a positive take on all this by looking at the data another way, by assuming that Sibieta’s estimate that remote teaching has mitigated 75 per cent of lost learning is true - which seems reasonable.

As noted, even this calculation estimates that the average pupil will lose out on around £10,000 over a lifetime, which doesn’t sound great.

But if we imagine the average pupil will go on to work for 45 years - from age 20 to 65 - this equates to a yearly loss of around £222 - or around £18.50 a month.

While still not ideal, this sounds a lot less awful than where we first started.

Dan Worth is senior editor at Tes