_How big is $10 trillion in the real world?_ In the absence of remedial action, the world stands to lose earnings that are the equivalent to 16% of the investments governments make in this cohort of students’ basic education.<sup>75</sup> This ratio illustrates the share of government investments in education that will be lost to COVID-19. In dollar terms, this loss is almost as large as the loss that governments have already incurred due to weaknesses in schooling which mean that the 11.2 years students spend in school only delivers 7.9 years’ worth of learning (LAYS).

# _How large might individual losses be?_

In the absence of remedial action, these lost earnings are the equivalent of individuals losing out on approximately $16,000 over their lifetime. This is the present value of foregone earnings of $872 per year for each student, over their entire work life. In the optimistic scenario where each student loses $355 per year, this would result in about $6,500 of lost earnings. In the pessimistic scenario the average person loses $1,408 per year and could lose as much as $26,000 over their lifetime.<sup>76</sup> _How unequally are losses distributed around the world?_ High Income and Middle Income Countries are likely to experience the vast majority of the absolute losses – about 98% in the intermediate scenario (Table A.3.6.). Low income countries on the other hand might experience 2% of these losses. IDA/Blend countries could constitute 5% of the world’s losses. However, the absolute magnitudes of these simulated losses do not tell the full story. These results are largely driven by between-country earnings inequality, and current labor market structures.

_As a share of spending on education, the poorest countries will lose more_ Low-income countries would be losing almost twice as much as Upper Middle Income countries and more than three times as much as high-income countries, when the losses from the intermediate scenario are expressed as a percentage of public spending on education. IDA/Blend countries could sustain learning losses that represent almost a quarter of their public spending on education. This finding underscores the urgent need to protect investments in education especially in the poorest countries, which are likely to suffer the highest relative losses, when it comes to investments they have already made in educating their students.

# _This crisis is still ongoing_

This crisis is not over, and our understanding of the ramifications to the economy and household welfare are being updated daily. Since March 2020 global growth projections have been frequently revised, and the recently released Global Economic Prospects (World Bank, 2020b) indicates that growth projections are likely to continue to go down. In each of these revisions, our expected number of student’s dropping out due to the household income shock is revised upwards. Our initial estimate, based on the March MPO suggested that approximately 2 million students would drop out of the education system; by May, this number had already been revised to 7 million, and

> 75 We estimate that this is the $ amount of public spending needed to deliver the current global average of 11.2 years of schooling as recorded in the HCI database. See Annex Table A.3.7.

> 76 Assuming a discount rate of 3% per year, a work life of 45 years, and average time to enter the labor market of 10 years for currently enrolled students.

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