The Covid-19 pandemic caused a disruption in human capital at critical moments in the life cycle, derailing the development of millions of children and young people in low- and middle-income countries, according to the first analysis of global data on young people who were under the age of 25 at the onset of the pandemic.

“Targeted policies to reverse the losses in foundational learning, health and skills are critical to avoid jeopardising the development of multiple generations,” says World Bank Group president David Malpass.

“The pandemic and school closures threatened to wipe out decades of progress in building human capital. 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,” he said.

The World Bank 'Collapse and Recovery: How Covid-19 Eroded Human Capital and What to Do About It' report analyses global data on the pandemic’s impacts on young people at key developmental stages of early childhood (up to five years), school age (between 6 and 14 years) and youth (between 15 and 24 years old).

The report found that today’s students could lose up to 10% of their future earnings owing to Covid-19-induced education shocks, while the cognitive deficit in today’s toddlers could translate into a 25% decline in earnings when these children are adults.

In low- and middle-income countries, nearly one-billion children missed out on at least a full year of in-person schooling owing to school closures, and more than 700-million missed one-and-a-half years. As a result, learning poverty, which was already 57% before the pandemic, has increased further in these countries, with an estimated 70% of ten-year-olds unable to understand a basic written text.

“Human capital, which is 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 pandemic shuttered schools and places of employment and disrupted other key services that protect and promote human capital, such as maternal and child healthcare and job training,” Malpass adds.

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

In the short term, for young children, countries should support targeted campaigns for vaccinations and nutritional supplementation, increase access to pre-primary education and expand coverage of cash transfers for vulnerable families.

Further, for school-age children, governments need to keep schools open and increase instructional time; assess learning and match instruction to students’ learning levels; and streamline the curriculum to focus on foundational learning.

For youth, support for adapted training, job intermediation, entrepreneurship programmes and new workforce-oriented initiatives are crucial, the World Bank says in its report.

In the longer term, countries need to build agile, resilient, and adaptive health, education and social protection systems that can better prepare for and respond to current and future shocks.

As a result of 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 mathematics, compared with pre-pandemic cohorts. In many countries, even after schools had reopened, preschool enrollment had not recovered by the end of 2021, and it was down by more than ten 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 states.

“Covid-19 dealt a heavy blow to youth employment. Forty-million people who would have had a job in the absence of the pandemic did not have one at the end of 2021, worsening youth unemployment trends,” Malpass points out.

“Youth earnings contracted by 15% in 2020 and 12% in 2021. New entrants with lower education will have 13% less earnings during their first decade in the labour market. Evidence from Brazil, Ethiopia, Mexico, Pakistan, South Africa and Vietnam showed that 25% of all young people were neither in education, employment nor training in 2021.”

“People under the age of 25 today, which are those most affected by the erosion of human capital, will make up more than 90% of the prime-age workforce in 2050,” says World Bank chief economist for human development and report lead author Norbert Schady.

“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.”

The World Bank Group is working closely with governments to protect and invest in people as they cope with and recover from the pandemic. The World Bank’s pandemic response financing reached $72.8-billion between April 2020 and June 2022, including $37.6-billion in International Bank for Reconstruction and Development commitments and $35.1-billion in International Development Association commitments.

During the same period, its financing in human development reached $47.5-billion and supported 300 projects in low- and middle-income countries.