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August 2020 Newsletter

Back to school?

Covid-19 has disrupted the lives of school-age children and students around the world. Whilst children in some countries are going back to school premises, others will continue to be homeschooled. In India alone, several states did not hold online classes for government school students. Children relied solely on other measures, such as educational TV and radio programs and physical workbooks, where available. For a large proportion of the population, though, the lack of access to TV or digital devices only increased the education inequality gap.

University students face similar challenges, with some students able to return to their campuses, while others have to remain at home. A portion of the latter group will most likely have to invest more hours learning independently due to the lack of face-to-face meetings and group and peer discussions. Evidence suggests that “good” peers can potentially improve students’ academic achievement, career choices, and labor market outcomes later in life.

As a result of these challenges, many students may reconsider their investment in university education. If they do, then perhaps they should look to the Mincer equation, which provides estimates of the average monetary returns of one additional year of education. Mincerian results are comparable, so individuals can use them to help guide their decisions about how much schooling they should invest in.

Recent studies using the Mincer equation have suggested that tertiary education, as opposed to primary education, now provides the greatest returns to schooling – a significant reversal seen worldwide (see figure).

On average, another year of education produces a private rate of return to schooling in excess of 5−8% a year. As such, there are few better investments an individual can make.

This has important implications, as it results in an increase in demand for tertiary education and puts pressure on policymakers to expand university education. This should not, however, come at the detriment of basic education, since primary education is a fundamental human service, and access to primary (and secondary) education is a prerequisite for entry into university.

As students adapt to the ‘new normal’ in a pandemic world, tertiary education is still likely to be a worthwhile investment for individuals as well as governments.

To find out whether skills gained from schooling or the
acquisition of credentials lead to increased wages,
read Harry Anthony Patrinos' article
Estimating the return to schooling using the Mincer equation (Deutsch) (Español)

What is the economic impact of Covid-19 around the world?

Editor-in-chief Professor Dan Hamermesh commissioned conversations with experts from South Africa, Japan, Ireland, Chile, Germany, Sweden, Canada and Spain on the effects in their countries:

Find more national responses to Covid-19 here.

Read our latest news stories:

Germany could provide a lesson in how to reopen schools in a pandemic

Germany closed its schools nation-wide as a result of the Covid-19 pandemic in mid-March.

Europe expecting a tsunami of job cuts

A new study by McKinsey & Company predicts millions of jobs are at risk as companies plan to downsize to offset the loss of business caused by the Covid-19 outbreak.

New study links air pollution to a higher risk of developing asthma in young children

The researchers in Denmark conducted an observational study of more than three million Danish children born from 1997 to 2014 and followed them for asthma onset and persistent wheezing from ages 1 to 15 years.

Numbers on student dropouts increase due to Covid-19

Numbers of student dropouts increase due to Covid-19

According to UNESCO, the education of over 154,000,000 students globally was disrupted when schools were forced to shut down due to the pandemic.

Female leaders handled coronavirus better than their male counterparts, reveals study

Countries led by women—including Germany, New Zealand, Bangladesh, and Serbia—suffered fewer deaths and Covid-19 cases than comparable countries led by men.

PM Scott Morrison promises to supply Covid-19 vaccines to Australia’s “Pacific family”

Australia will provide vaccines to the country’s “Pacific family, as well as regional partners in Southeast Asia."

Covid-19: Japan’s economy shrinks at a record rate

According to government data, Japan’s economy shrank at an annual rate of 27.8% in April–June, which is the worst contraction on record.

Anti-coronavirus bus shelters installed in Seoul, South Korea

The ten new smart shelters, installed in a district of South Korea’s capital, Seoul, have temperature sensors and UV lamps.

UK falls into recession for first time since the global financial crisis

The UK economy shrank by 20.4% between April and June compared with the first three months of 2020.

Indian food delivery company introduces “period leave”

Zomato has announced it will grant its female employees ten days of “period leave” each year.

Read some of our recent commentaries:

Cognitive performance in the home office—What professional chess can tell us

A crucial question for companies is how workers’ productivity changes in the home office compared to the regular office.

Covid-19 shutdowns and the self-employed

Mothers have been particularly burdened; consequently, many years of gains in women’s labor market position may have been undone by these shutdowns.

Racial and ethnic disparities in the face of the coronavirus

The urgency of the racial issue has been widely acknowledged within the medical literature that focuses on clinical outcomes.

The power of social capital during a pandemic

Social capital is a key factor for the successful containment of a public health emergency, especially in the absence of lockdown policies.

Does policy communication during Covid-19 work?

Monetary and fiscal policies affect the economy, but how they operate remains a point of contention.

Behavior during a pandemic

Policies such as social distancing are especially burdensome for some people depending on their income, housing, and work arrangements.

University educated workers and Covid-19 shocks

University educated workers and their ability to deal with Covid-19 and future shocks

University educated workers in low- and middle-income countries are far better at adapting to work-from-home technologies, or shifting to jobs that require technological skills.

Four mistaken theses about universal basic incomes

Despite universal basic income (UBI) being present in the policy debate for more than two decades, its evaluation still suffers from the popularity of a variety of mistaken perceptions or interpretations.

Elections and the Covid-19 pandemic

How should governments handle elections during the Covid-19 pandemic?

What if you saw reports of thousands of people volunteering as health workers in their communities?

Would you be inspired and join in or sit back knowing that others are filling the void?

You can find more commentaries
on our opinion page

Upcoming events:

3rd IZA / World Bank / NJD / UNU-WIDER 2020 Jobs and Development Conference, Sept 01-04 - Online
IZA Workshop on Labor Market Institutions, Sept 11-12 - Online
AIEL XXXV National Conference of Labour Economics, Sept 17-18 - Online
3rd IDSC of IZA/University of Luxembourg Workshop: Matching Workers and Jobs Online - New Developments and Opportunities for Social Science and Practice, Sept 18-19 - Online
10th Annual International Conference on Immigration in OECD Countries, Dec 07-08 - OECD Conference Centre, Paris
World Employment Conference 2020: Steering a labour market in transformation, Sept 07-08 2021 - Madrid, Spain

Articles relating to pandemics and the labor market:

To read more, consult our new key topic page Covid-19—
Pandemics and the labor market.

The Covid-19 pandemic is likely to have lasting economic and social impacts on employment, income, and working conditions in labor markets around the world.

IZA has therefore invited a number of experts to monitor individual countries' crisis responses on their
Crisis Response Monitoring site:

Latest articles

All one-pagers are also available to read and download in German. Find out more.

One-pagers are now available in Spanish. Take a look at the Spanish key topics page.

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On average, another year of education produces a private rate of return to schooling in excess of 5−8% a year. As such, there are few better investments an individual can make.

To find out whether skills gained from schooling or the acquisition of credentials lead to increased wages, read Harry Anthony Patrinos' article Estimating the return to schooling using the Mincer equation (Deutsch) (Español)

Related articles:

What is the economic impact of Covid-19 around the world? Editor-in-chief Professor Dan Hamermesh commissioned conversations with experts from South Africa, Japan, Ireland, Chile, Germany, Sweden, Canada and Spain on the effects in their countries: