Roger Farmer's picture
Affiliation: 
University of Warwick
Credentials: 
Professor of Economics

Voting history

The Economic Cost of School Closures

Question 3: To what extent will school closures increase gender inequality due to unequal gender distribution of the burden of school closures?

Answer:
To a small degree but persistently
Confidence level:
Confident
Comment:
I could foresee that reallocations of household tasks and gender based reallocations in corporate structures might have persistent effects on the way that adults choose to spend their time.

Question 2: To what extent will school closures increase inequality in human capital development?

Answer:
To a small degree and temporarily
Confidence level:
Confident
Comment:
See my answer to 1. Social structures, like human bodies, heal quickly in response to minor abrasions.

Question 1:What damage will school closures have on economic growth over a 10-15 year horizon?

Answer:
None
Confidence level:
Confident
Comment:
“Economic growth” is a nebulous concept. If measured by year on year real GDP growth, it is already a statistic with a very high variance. One year of lost schooling will at best show up as a rounding error over a 10 to 15 year horizon. If the closures were to persist for several years, they would begin to have serious consequences not just for economic growth, but for the broader social fabric.

Will COVID-19 Cause Permanent Damage to the UK Economy?

Question 2: Which aspect of the economy poses the greatest risk for a slow recovery?

Answer:
Private debt and financial markets (e.g. debt overhang, bank failures)
Confidence level:
Very confident
Comment:
The correct answer is: “all of the above”. We are asked which aspect policy makers should devote most attention to? I selected “debt overhang and financial markets” because that is where the clearest opportunity lies to support a rapid recovery.

Question 1: How quickly will the economy rebound (e.g. to the pre-pandemic trend) once the COVID-19 pandemic has been contained and absent major policy interventions? 

Answer:
The economy will rapidly return to its pre-crisis growth trend, but there will be a permanent effect on the level of GDP
Confidence level:
Confident
Comment:
My best guess, is that GDP will recover by somewhere between a half and two thirds of the way to its previous trend growth path before the end of the year as employees return to jobs that were preserved. The remaining half to one third of the recovery will be slower as the economy transitions to a new normal with some industries shrinking and others taking their place. There is some evidence that very low unemployment is correlated with slow growth which raises the intriguing possibility that initially at least, we will see productivity growth that is noticeably higher than the sluggish numbers that have characterized the past decade. Policy has a huge role to play in determining the nature of the recovery and I have little confidence that the recovery will be well managed given the inadequacy of the models that guide current thinking.

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