The COVID pandemic has derailed the education and earning potential for an entire generation creating a looming crisis for the world’s economic future.

In a new report the World Bank warned the COVID-19 pandemic caused a massive collapse in human capital at critical moments in the life cycle, derailing development for millions of children and young people in low- and middle-income countries.

The report, ‘Collapse and Recovery: How COVID-19 Eroded Human Capital and What to Do About It’, analysed global data on the pandemic’s impacts on young people at key developmental stages: early childhood (0-5 years), school age (6-14 years), and youth (15-24 years). It found that today’s students could lose up to 10% of their future earnings due to COVID-19-induced education shocks. And the cognitive deficit in today’s toddlers could translate into a 25% decline in earnings when these children are adults.

“Human capital—the knowledge, skills, and health that people accumulate over their lives—is key to unlocking a child’s potential and enabling countries to achieve a resilient recovery and strong future growth,” the report warned. “Yet the pandemic shuttered schools and places of employment and disrupted other key services that protect and promote human capital, such as maternal and child health care and job training.”

“The pandemic and school closures threatened to wipe out decades of progress in building human capital. Targeted policies to reverse the losses in foundational learning, health, and skills are critical to avoid jeopardizing the development of multiple generations,” said World Bank Group president David Malpass, (pic) who announced his resignation, yesterday. “Countries need to chart a new course for greater human capital investments to help citizens become more resilient to the overlapping threats of health shocks, conflict, slow growth and climate change and also lay a solid foundation for faster, more inclusive growth.”

Due to the pandemic, preschool-age children in multiple countries have lost more than 34% of learning in early language and literacy and more than 29% of learning in math, compared to pre-pandemic cohorts, according to the report. In many countries, even after schools had reopened, preschool enrolment had not recovered by the end of 2021; it was down by more than 10 percentage points in multiple countries. Children also faced greater food insecurity during the pandemic.

Among school-age children, on average, for every 30 days of school closures, students lost about 32 days of learning.

“This is because school closures and ineffective remote learning measures caused students to miss out on learning and also forget what they had already learned,” the report added. “In low- and middle-income countries, nearly 1 billion children missed out on at least a full year of in-person schooling due to school closures, and more than 700 million missed one and a half years. As a result, learning poverty—already 57% before the pandemic—has increased further in these countries, with an estimated 70% of 10-year-olds unable to understand a basic written text.”

It added the window for addressing setbacks in human capital accumulation is small, as gaps in early stages of the life cycle tend to widen over time. Without urgent action, the pandemic also threatens to deepen poverty and inequality.

“People under the age of 25 today—that is, those most affected by the erosion of human capital—will make up more than 90% of the prime-age workforce in 2050,” said Norbert Schady, chief economist for Human Development at the World Bank, and a lead author of the report. “Reversing the pandemic’s impact on them and investing in their future should be a top priority for governments. Otherwise, these cohorts will represent not just a lost generation but rather multiple lost generations.

Due to the pandemic, preschool-age children in multiple countries have lost more than 34% of learning in early language and literacy and more than 29% of learning in math, compared to pre-pandemic cohorts, according to the report.