Schooling lost due to Covid “nearly insurmountable”; Shortfalls in women’s pensions a “shameful shambles”

Today’s global news summary brings news affecting the world, the UK, and the US, and discusses issues as diverse as schooling, pensions, and social safety nets.  

• Global news: Schooling lost due to Covid “nearly insurmountable”
• UK: Shortfalls in British women’s state pensions a “shameful shambles”
• US: Cash payments to poor mothers increases babies’ brain activity

Schooling lost due to Covid “nearly insurmountable,” reports UN data
Education and human capital
Up to 70% of 10-year-olds in low- and middle-income countries lack basic reading skills, up from 53% before the pandemic, according to UN data reported in the Guardian. All around the world children have lost basic literacy and numeracy skills during the two years of the Covid-19 pandemic; their mental and physical health have also been affected. Classroom closures are still troubling more than 635 million children worldwide, with younger and more marginalized children suffering the most. In South Africa schoolchildren are now nearly a whole school year behind where they should be, while in Ethiopia primary school children are estimated to have learned only 30–40% of the mathematics they would normally learn in a school year. Unicef’s head of education, Robert Jenkins, warns “just reopening schools is not enough. Students need intensive support to recover lost education.”

Gemma Cherry and Anna Vignoles tell us the skill level of a country’s workforce is correlated with its growth in GDP per person: “across a range of OECD countries, a 1% increase in literacy skills—as measured by the Survey of Adult Skills—is associated with a 3% increase in GDP per capita.” This suggests that individuals with better basic skills are more productive and hence countries with a more skilled workforce will experience more rapid economic growth. The loss of these skills could therefore have repercussions for entire countries.

Related content
IZA World of Labor articles
What is the economic value of literacy and numeracy? 
How effective is compulsory schooling as a policy instrument?
Estimating the return to schooling using the Mincer equation
How do adult returns to schooling affect children’s enrollment?

Key topics
Higher education and human capital
The role of education in developing countries
Covid-19—Pandemics and the labor market

Opinions
The long-term consequences of missing a term of school
Pandemics and the prospects for higher education in developing countries

IZA Discussion Papers
School Closures and Effective In-Person Learning during COVID-19: When, Where, and for Whom
The COVID-19 Pandemic, Well-Being, and Transitions to Post-secondary Education

Shortfalls in British women’s state pensions a “shameful shambles”
Labor markets and institutions | Demography, family, and gender
A committee of MPs in the UK has branded a £1bn shortfall in state pension payments to 134,000 women since 1985 a “shameful shambles,” reports the BBC. Under a previous state pension system married women who had a small pension of their own right could claim a 60% basic state pension based on their husband’s record of contributions. The problems at the Department for Work and Pensions (DWP) relate to the calculation of these benefits. Widows and divorcees have also been affected. There are concerns the mistakes could be repeated in future underpayment calculations. The committee’s report recommends, among other things, that the DWP update its computer systems and clarify how it will treat underpayments relating to divorced women. A spokesperson for the DWP says they have set up a dedicated team and devoted significant resources to processing outstanding cases.

Marek Góra, in his IZA World of Labor article says “Governments need to make pension systems more transparent and make adjustments to reduce the burden on workers, returning the pension system to its social role, which is helping the very old without overburdening the young. Pension solidarity should not be confused with political discretion. Transparency and fairness are the key preconditions when adjusting pension systems for the 21st century.”

Related content
IZA World of Labor articles 
The incentive effects of minimum pensions
Redesigning pension systems
Pension reform and couples’ joint retirement decisions

Key topics
The aging workforce and pensions reform

Opinions
Wage subsidies may not help to increase employment among older workers
Can defined contribution pension plans reduce worker mobility?

Videos
Astrid Kunze - Why do women fall behind men

IZA Discussion Papers
Stung by Pension Reforms: The Impact of a Change in State Pension Age on Mental Health and Life Satisfaction of Affected Women
Pension Information and Women's Awareness

Cash payments to poor mothers increases babies’ brain activity
Labor markets and institutions | Program evaluation
As reported in the New York Times, a new study in which poor mothers were provided with cash stipends for the first year of their children’s lives "appears to have changed the babies’ brain activity in ways associated with stronger cognitive development.” Although the changes are modest, if the differences translate to higher skills in the future, the findings have implications for global social safety net policies. Martha J. Farah, a neuroscientist at the University of Pennsylvania who reviewed the study, said: “It’s proof that just giving the families more money, even a modest amount of more money, leads to better brain development.” Poor children have been shown to start school with weaker cognitive skills, but it has not been clear whether those differences result from a shortage of money, low parental education, or neighborhood influences. This study offers evidence that poverty itself holds children back from their earliest moments. However, researchers are still trying to determine why the money altered brain development. Did it: allow parents to buy better food or afford better health care; reduce damaging levels of parental stress; or allow mothers to work less and spend more time with their children?

IZA World of Labor author David C. Ribar tells us that “Many disadvantaged people miss out on financial support by not participating in assistance programs. This can be because of the stigma of receiving benefits, or because of onerous application processes, confusing rules, misinformation, and demeaning delivery methods.” He says that “Agencies can lower these barriers and boost participation by providing reminder notices, opt-in defaults and automatic enrollment to overcome inertia. They can also conduct outreach campaigns to reduce information gaps and stigma and develop simpler program rules that ease administrative burdens.”

Related content
IZA World of Labor articles 
Is unconditional basic income a viable alternative to other social welfare measures?
How to improve participation in social assistance programs
Social protection programs for women in developing countries

Key topics
What can policymakers do to reduce poverty?
What is economic inequality?

Opinions
Four mistaken theses about universal basic incomes

IZA Discussion Papers
Child Health and Parental Responses to an Unconditional Cash Transfer at Birth
Baby Bonuses and Early-Life Health Outcomes: Using Regression Discontinuity to Evaluate the Causal Impact of an Unconditional Cash Transfer
Bonus Skills: Examining the Effect of an Unconditional Cash Transfer on Child Human Capital Formation