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Q&A: What you need to know about ‘the price of inaction’ in education
UNESCO, OECD and the Commonwealth Secretariat have developed the first global report to illustrate the monetary costs to economies around the world of leaving children and youth behind in education.
The new report, The price of inaction: The global private, fiscal and social costs of children and youth not learning, underscores significant challenges in achieving inclusive, equitable quality education and gender equality globally. Here is what you need to know.
What are the main challenges highlighted in the new report regarding education globally?
Despite efforts by countries and progress achieved, 128 million boys and 122 million girls remain out of school. Even in high-income countries, a quarter of children have less than basic skills. Skill deficits reach 94 per cent in sub-Saharan Africa and 88 per cent in South and West Asia, 74 per cent in the Arab States and 64 per cent in Latin America and the Caribbean.
Girls have more difficulty accessing education and are more likely than boys to be out of school at the primary level. Meanwhile, boys are at greater risk of repeating grades, failing to progress and complete their education, and of not learning while in school. Ensuring that all girls and boys are in school and learning requires increased investments in education and gender-transformative action.
What are the key findings of the report?
This study finds that, by 2030, the private, fiscal and social costs of children leaving school early and not gaining basic skills are enormous, adding up to trillions of US dollars lost to economies around the world.
- By 2030, globally, the annual private costs of the current shares of early school leavers and children with less than basic skills will be US$6.3 trillion and US$9.2 trillion, or 11 and 17 per cent of global GDP, respectively. Estimating these private costs to a twenty-year horizon raises these values as much as 20 times higher.
- By 2030, globally, the annual fiscal costs of early school leavers and children with less than basic skills will amount to US$1.1 trillion and US$3.3 trillion, respectively.
- By 2030, globally, the annual social costs (private and fiscal costs, minus the costs of raising taxes) of early school leavers will equal US$6 trillion. They will equal US$10 trillion due to children with less than basic skills. The latter corresponds to more than the combined annual gross domestic product (GDP) of France and Japan, which stood at US$9.8 trillion in 2022.
- In the subset of countries for which data are available, the loss of GDP due to low levels of socio-emotional skills by 2030 will be as high as US$7.4 trillion.
How do low levels of education impact the global economy according to the report?
Low levels of education have profound economic implications. The report estimates the global costs of children achieving less than basic skills at US$ 10 trillion. These include direct impacts like reduced income and productivity, as well as broader fiscal effects such as decreased tax revenue and increased public spending on social issues like health and law enforcement.
Education is not only a fundamental human right but also a strategic economic imperative that can lead to substantial increases in GDP and national productivity. A ten per cent reduction in the shares of early school leavers and children with less than basic skills increases annual GDP by 1-2 percentage points. Reducing the number of early school leavers and children with less than basic skills by one percentage point would translate to an annual global gain in labour income of US$ 470 billion and over US$ 650 billion, respectively.
What strategic recommendations does the report make to improve educational outcomes worldwide?
To combat the pressing issues identified, the report recommends several strategic actions, including:
- Guaranteeing free, quality education for all to eliminate financial barriers.
- Create gender-transformative, inclusive and empowering learning environments that challenge unequal power dynamics, gender bias and stereotypes, including through curricular and pedagogical approaches that respect difference and promote equality.
- Prioritizing investments in early childhood education to set a strong foundation for lifelong learning.
- Upgrading educational infrastructures and enhancing teacher training to improve the quality of education delivered.
What are the expected benefits of implementing the recommended educational investments outlined in the report?
Implementing these investments is expected to yield significant economic and social benefits. Better educational outcomes directly contribute to economic growth by improving labour productivity and increasing potential earnings for individuals. Furthermore, better education leads to more stable societies with lower rates of crime and early pregnancies creating a positive cycle of growth and development. The report emphasizes that strategic educational investments are not only cost-effective but essential for sustainable global development.
The new report was launched at the first-ever Stocktake of Transformative Actions in Education which took take in Paris on 17 June 2024.
