Aggregate and Intergenerational Implications of School Closures: A Quantitative Assessment

65 Pages Posted: 3 Jun 2021 Last revised: 19 Sep 2022

See all articles by Youngsoo Jang

Youngsoo Jang

University of Queensland - School of Economics

Minchul Yum

University of Southampton; CEPR

Date Written: September 19, 2022

Abstract

This paper quantitatively investigates the medium- and long-term macroeconomic and distributional consequences of school closures through intergenerational channels. The model economy is a dynastic overlapping generations general equilibrium model in which schools, in the form of public education investments, complement parental investments in producing children's human capital. We find that unexpected school closure shocks have long-lasting adverse effects on macroeconomic aggregates and reduce intergenerational mobility, especially among older children. Higher substitutability between public and private investments induces smaller damages in the aggregate economy and the affected children's lifetime income, while exacerbating negative impacts on intergenerational mobility and inequality.

Keywords: Intergenerational Mobility, Lifetime Income, Parental Investments, Aggregate Loss, Substitutability, Covid-19

JEL Classification: E24, I24, J22

Suggested Citation

Jang, Youngsoo and Yum, Minchul, Aggregate and Intergenerational Implications of School Closures: A Quantitative Assessment (September 19, 2022). Available at SSRN: https://ssrn.com/abstract=3857687 or http://dx.doi.org/10.2139/ssrn.3857687

Youngsoo Jang

University of Queensland - School of Economics ( email )

St Lucia
Brisbane, Queensland 4072
Australia

Minchul Yum (Contact Author)

University of Southampton ( email )

Southampton
United Kingdom

CEPR ( email )

London
United Kingdom

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