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Tw The Key Icons Set 4 2022 09 16 Economic Recovery
Education and

Economic Recovery

Key message

Education is essential for economic recovery, growth and job creation.

When a country is recovering from an economic downturn, investing in the next generation of innovators, makers and creators through quality education is the best way to jump-start an economy. The changing nature of work and the shifting landscape of the job market makes education an even more important tool to help young people not just re-enter a new labour market, but also re-skill and reimagine their futures.
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Key challenges
  • Education cuts after an economic crisis can hurt learning and future growth. In the US, when school spending was cut by 10% after the 2008 recession, test scores fell by nearly 8%.
    (Jackson et al., 2019)
  • Post-pandemic economic recovery depends on strong education systems. Predictions estimated that the current pandemic would wipe out 6.7% of working hours globally in the second quarter of 2020, equivalent to 195 million full-time workers. Some jobs will never return and others will cease to exist. Education prepares young people to enter into a new and changing workforce.
    (ILO, 2020)
  • Economic recovery following a pandemic is dependent on investment in strong education. Without immediate remedial education when school resumes, some estimates suggest today’s cohort of learners could face a US$17 trillion loss in future earnings over the next generation, equivalent to 14% of today’s global GDP.
    (UNICEF, 2021)
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Make the case
  • Education spending is more effective at job creation than tax cuts. A study found that spending on education created almost twice as many jobs as would be expected from tax cuts of equal value and also resulted in better paying jobs.
    (Pollin et al., 2009)
  • Education is strongly associated with GDP. Worldwide, each additional year of schooling has been linked to an increase in GDP per capita of around 18%.
    (UNICEF, 2015)
  • Investment in education can yield high returns. Each dollar invested in education can yield more than US$5 in additional gross earnings in low-income countries and US$2.50 in lower-middle-income countries.
    (Education Cannot Wait, 2019)
  • Better educated individuals are more resilient in the labour market. Education systems that are responsive to labour market needs can create more resilient graduates. They can prepare graduates for globalisation, climate change and digitalisation by equipping them with strong foundational skills so that they can adapt.
    (OECD, 2019)
  • Most of the new jobs created in the previous economic recovery went to college-educated workers. After the 2008 recession, jobs for college graduates in the US sharply rebounded and increased by 8.4 million, but jobs for those with a high school diploma or less only increased by only 80,000.
    (Carnevale et al., 2016)
  • Early childhood education and increased childcare availability helps parents, especially mothers, re-enter the workforce. A low-cost, universal childcare programme in Quebec increased labour force participation by 12.3%.
    (MacEwan, 2013)  (Lefebvre & Merrigan, 2005)
  • Investment in education is urgent to meet future skills demand. It is estimated that 42% of core skills required for existing jobs will have changed by 2022. By 2030, more than half of youth worldwide will not have the necessary skills for what the workplace of the future requires.
    (Education Commission, 2016)  (World Economic Forum, 2020)
  • Investment in STEM education and jobs will boost recovery. Cities with more STEM workers tend to have higher job growth, employment rates, patent rates, wages, and exports. In the US, for each high-tech job added, an additional five jobs are created.
    (Moretti, 2013)  (Rothwell, 2013)
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Key opinions
Filippo Grandi Portrait
Filippo Grandi
UN High Commissioner for Refugees
For the 1% of the world’s population who are displaced, education is the key to unlocking a positive and resilient future. For children affected by crisis and conflict, education provides vital protection, and a sense of normalcy and safety. COVID-19 showed numerous examples of how refugees who had received support to harness their energy and complete their education were giving back to the communities which hosted them – as doctors, nurses, teachers and support workers. Access to a quality education prepares refugee students to take care of themselves and their communities, stepping up as leaders and role models and enabling rapid generational change which will in turn create a brighter future for their own children.
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Kristalina Georgieva Managing Director Imf Headshot
Kristalina Georgieva
Managing Director of the IMF
Safeguarding our post-pandemic future means safeguarding our human capital. Over a billion learners across the world have been affected by the virus-related disruption to education. That is why we need more investment—not just spending more on schools and distance-learning capacity, but also improving the quality of education and the access to life-long learning and re-skilling. These efforts can pay large dividends in terms of growth, productivity, and living standards. We can build a more resilient world by harnessing the vast potential that education provides for people to learn, grow, and transform their lives.
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Key talking points
  • Education is at risk when difficult budget decisions must be made.
  • Studies show that during an economic recovery investing in quality education improves the likelihood of recovery, growth and labour market participation.
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