Blog by Ponke Danker, Coordinator of the Irish Forum for Global Education
This summer has seen an important publication and learning: UNESCO, together with the OECD and the Commonwealth Secretariat undertook research to calculate the costs of children and youth not being in school or gaining basic skills. The findings are monumental: with the gap in education remaining, the global economy loses an estimated US$10 trillion annually. Furthermore, the report directly links early school leaving and acquiring less than basic skills with a lower quality of life.
For the first time, the report “The price of inaction – The global private, fiscal and social costs of children and youth not learning” offers a comprehensive and detailed analysis of the costs borne by
- individuals (private costs),
- the government (fiscal costs), and
- society (social costs)
of girls and boys leaving school early or failing to attain basic cognitive and socio-emotional skills. The report includes global findings by world regions and in-depth analyses of twenty selected countries. Findings are presented for the total population and broken down by sex.
“Fewer economic resources suggest that governments have less to spend to reduce early school leaving or the share of children with less than basic skills, therefore trapping the economy in a status of low education and low productivity.”
The report also takes a closer look at various elementary cost components, such as the loss of labour income, productivity losses, lower tax revenues and additional public expenditures on public health, education and law and order, negative effects on health, and increased costs of support programmes and change in welfare transfer.
For twenty selected countries with gender disparities either at girls’ expense or boys’ expenses UNESCO published country profiles in separate reports. Afghanistan exemplifies the high cost of not addressing gender disparities or rather enforcing gender disparities. The report shows that the suspension of girls’ and young women’s access to secondary education results in private costs of $1.5 billion due to girls’ early school leaving.
A snapshot of the key findings: The price of inaction
- Annual private costs (economic costs borne by individuals) by 2030 = US$6.3 trillion/11 per cent of global GDP due to early school leavers and US$9.2 trillion/17 per cent of global GDP due to children with less than basic skills.
- Annual fiscal costs (governments) by 2030 = US$1.1 trillion due to early school leavers and US$3.3 trillion due to children with less than basic skills.
- Annual social costs (private and fiscal costs, minus the costs of raising taxes) by 2030 = US$6 trillion due to early school leavers and US$10 trillion due to children with less than basic skills.
- Loss of GDP by 2030 due to low levels of socio-emotional skills = US$7.4 trillion (19 per cent of annual GDP).
- Sub-Saharan Africa currently bears the highest cost, as a percentage of GDP, of early school leavers and children with less than basic skills. In this region, the annual private cost is estimated at 19 and 26 per cent of GDP in 2030, respectively.
- 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.
- Getting every child in school would raise future world GDP by more than US$6.5 trillion annually, while at the same time eliminating the social costs of failing to achieve SDG 4.
But the report doesn’t stop at the monetary costs. Conscious of values and consequences beyond monetary profit, it also provides estimates for non-monetary costs, including:
- early pregnancies,
- corruption,
- crime, and
- tax morale.
Key findings non-monetary costs
- Keeping girls in school contributes to ending child marriage and reducing early and unintended pregnancies:
- Each year of secondary schooling can significantly reduce the risk of girls marrying and having a child before age 18.
- Girls leaving school early or acquiring less than basic skills is associated globally with 59 per cent and 69 per cent increase in early pregnancies, respectively.
- The incidence of crime increases when children leave school early or have less than basic skills:
- The global incidence of homicides is 8.7 per cent higher due to early school leavers and 57 per cent higher due to children having less than basic skills.
- If children have less than basic skills, the incidence of robberies and physical assaults is 39 per cent and 37 per cent higher, respectively.
- With young learners having less than basic skills, the incidence of sexual violence is 27 per cent higher.
- The economic costs of youth disengagement are sizeable: Globally, the rate of young adults not in employment, education or training (NEET) is 38 per cent higher because of children with less than basic skills. The prevalence of girls’ NEET is 28 per cent and 42 per cent higher, respectively, compared to 24 and 34 per cent for boys.
Lastly, the report analysis the costs of a lack of socio-emotional skills and finds that the global costs of having socio-emotional skills below the highest attainable levels represent over US$7.4 trillion or 19 per cent of annual GDP.
The report clearly demonstrates the influence of education on economic development and poverty reduction. It concludes that reducing early school leaving and providing basic skills to all children is an effective development tool. These findings guided the IFGE’s Pre-Budget Submission for 2025, in which we ask the Irish government to increase the proportion of the ODA budget allocated to education in 2025, ensuring education remains a priority in Ireland’s development cooperation.
“If governments do not invest in education, they have fewer economic resources. In turn, they have less to spend on reducing early school leaving and the share of children with less than basic skills, therefore trapping their economies in a status of low education and low productivity.”
Education is a powerful tool, benefiting both economies and society. It is crucial for personal development, individual well-being, social justice, and poverty reduction. The cost of not fulfilling SDG 4 and the right to education is too high for our world to bear. The UNESCO report underscores that investing in education is a cost-effective strategy for economic development, prosperous societies, and increased gender equality.
A set of policy recommendations in chapter 6 of the report provides insights on proven and effective policy changes to tackle early school leaving and less than basic skills.
