MICROFINANCE PAPER WRAP-UP: “The Impact of the COVID-19 Pandemic on Education Financing,” by Samer Al-Samarrai et al, published by the World Bank Group

This paper explores the economic implications of COVID-19 and arguments for mobilizing resources from government and development partners to alleviate educational losses in terms of educational services, student enrollment rates and student achievement. The authors also consider recent policy interventions and proposals in contrast to similar efforts made during past crises. The main takeaways from the article include:

(1) As governments prioritize funding public health measures, the authors expect a decline in allocations to education.

(2) Despite recent progress, there is still a large gap in funding between low-income and lower middle-income countries versus high-income countries. Even if economic growth returns in 2021, government spending still may decline. Education spending forecasts vary by region, with an absolute decline forecast in high-income countries. In other regions, lower rates of increase are expected relative to the increases that were prevalent before the pandemic.

(3) Households are expected to experience additional income shocks as unemployment and underemployment rates continue to rise, leading to a decrease in household investment in education. This will be exacerbated by a projected 20-percent decrease, equivalent to USD 142 billion, in the amount of remittances sent by migrants to family members in low-income and lower middle-income countries. In low-income countries, household income shocks may reduce educational participation rates. In relatively affluent countries, however, past economic crises have led more people to enter educational programs, with any declines being minimal. Among those continuing to study, however, lower incomes may precipitate a shift to public schools, further straining resources that were already stretched before the pandemic.

(4) Donor funding for education is expected to fall, in line with broad economic indicators. During the five years following the 2008 financial downturn, education spending fell 2 percent per year, only returning to historic levels after seven years.

(5) Provisions such as stipends and “feeding programs” facilitate remote learning, as well as encourage the enrollment and re-enrollment of students who have been disproportionately impacted by the pandemic. Schools looking to reopen would require additional funding for these programs and to “implement new health and safety requirements, undertake the outreach activities needed to persuade students to return, and facilitate remedial teaching to minimize learning losses.”

(6) The authors argue that increased government funding for education would support parents in returning to work, thus stimulating economic growth. To do this, governments may need “emergency funding” from development partners. This, in turn, requires addressing the issue that data on educational systems often “is not assembled in a way that is meaningful nor is it made publicly available. At the international level, information on education spending is only available with a significant delay. The ongoing [COVID-19] crisis further highlights the need to address these information gaps.”

By Jessica McLeod, Research Associate

This is a summary of a publication by Samer Al-Samarrai, Omar Arias, Jaime Saavedra Maulshree Gangwar and Priyal Gala; published by the World Bank Group; May 2020; 12 pages; available at http://documents1.worldbank.org/curated/en/479041589318526060/pdf/The-Impact-of-the-COVID-19-Pandemic-on-Education-Financing.pdf

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