Weak Growth, High Inflation, and a Cost-of-Living Crisis | (News and Research 334)

Spring 2023 issue of the ECA Economic Update: Weak Growth, High Inflation, and a Cost-of-Living Crisis | Economic growth slowed sharply last year in Europe and Central Asia, as Russia’s invasion of Ukraine, a surge in inflation, and the sharp tightening of monetary policy and financial conditions hit private consumption, investment, and trade. The marked increase in food and energy prices boosted inflation to a pace not seen in nearly 25 years. Central banks tightened monetary policy in response to higher inflation, but policy rates are still negative in real terms. Fiscal adjustment advanced in some countries as unanticipated increases in revenues were not accompanied by stepped-up growth in spending. The burden of inflation was spread unevenly across households. The poorest households faced inflation that was more than 2 percentage points higher than the inflation faced by the richest households, with this difference exceeding 5 pp in some countries.

On Higher Education | Recent news stories have focused on the problems of higher education, namely the growing requirement for higher education for jobs, lack of confidence in degrees, low returns to certain disciplines, and student debt. President Biden recently talked about factories offering thousands of “jobs paying $130,000 a year, and many don’t require a college degree.” In the US, people are losing faith in university education. But as The Economist reports, the returns to tertiary education have remained high, despite the growing numbers of university students. Returns to education are high and remain high despite growing enrollments. The returns to higher education have remained high over the past few decades while enrollment in higher education has gone up three-fold since 1970. This is contributing to rising inequality and suggests an urgent need to quality and access, as well as sustainable financing. More information would also help. In the US, there is a shift to disciplines that are better linked to higher earnings. To do this more effectively, prospective students need information on costs and likely benefits of schools and disciplines. In some countries, this is entirely possible. In the US, the Department of Education publishes the College Scorecard. It provides information on a range of costs associated with attending universities and faculties, along with mean earnings of graduates. With a few assumptions, one can easily estimate a prospective rate of return.

ECA Talk Returns to Education Turns 50 on March 29, 2023, Event Replay. Watch the discussion from earlier this week reassessing progress made on measuring the benefits of education 50 years after the publication of George Psacharopoulos’ pivotal study Returns to Education. Timestamps for remarks and panel discussions during the event replay are marked under the Agenda tab.

War is shaping a generation of Ukrainian schoolchildren and teachers | Christian Caryl | The children of School 17 are on their way to class when an air raid sirensounds. Cheerful chaos ensues. No one seems afraid; alerts happen often, and everyone knows what to do. The younger kids head for the basement shelter, a bunkerlike space spruced up with colored lights and bright paint. The upper grades congregate in a ground-level hallway whose windows are covered by concrete slabs, transforming the once-airy corridor into a dark but safe tunnel… So far, more than 2,000 Ukrainian schools have been damaged by the fighting, more than 300 of them destroyed, according to the Ukrainian Ministry of Education. And even schools physically untouched are struggling with the reverberations of a shattered economy, the constant threat of air attack and the everyday stress of a grinding conflict… It’s hard to create a sense of community when many of its members are gone. The invasion brought mass dislocation just as Ukrainian schools were emerging from two years of online learning during the pandemic. In the past year, more than 8 million people have left Ukraine, and an estimated 6 million have moved within the country. Only 28 percent of Ukrainian children are going to school in person, according to former education minister Liliya Hrynevych… A good education system should extend beyond daily lessons to help children learn to adapt to life. It should aim to produce good citizens who know their obligations as well as their rights. In this way, the war has offered an opportunity. “It’s all about using this tragic moment of history to change things,” said Anna Novosad, another former education minister who now runs a charity working to revive damaged schools. She and other reformers want to see an expanded role for civics classes that will reinforce democratic values. Ukraine’s schoolchildren have, in the past year, absorbed a lifetime’s worth of lessons about sacrifice and struggle — and this stands to shape their society. “These children will be different,” Hrynevych said. “They will live among heroes. They will see how people gave their lives for the freedom and independence of Ukraine.”

Should Communities Be Managing, Governing or Supporting Schools? A Review Essay on the System Conditions under Which Different Forms of Community Voice Can Improve Student Learning | Jason Silberstein | There are many different potential roles that parents and communities can play within education systems. This essay reviews the different ways that parents and communities can exercise their individual and collective voice within local schools. It develops a typology to distinguish between three different forms of voice and explores the enabling conditions in the wider system that each form of voice requires to improve student learning outcomes.

Post COVID-19 Test Score Recovery: Initial Evidence from State Testing Data | Clare Halloran, Claire Hug, Rebecca Jack, Emily Oster | There is emerging evidence of learning recovery post COVID-19 school closures in the United States. By 2022, 20% of test score losses are recovered in English language arts and 37% in math. However, there is large state-level variation in recovery rates from full recovery to further losses.

Submit a Manuscript to the Journal Education Economics for a Special Issue on the 50th Anniversary of the Returns to Education: An International Comparison | Manuscript deadline: 31 October 2023 | Special Issue Editor: Harry Patrinos, World Bank | Submit An Article | 50th Anniversary of the Returns to Education: An International Comparison | This year is the 50th anniversary of the publication of the book, Returns to Education: An International Comparison, by George Psacharopoulos (assisted by Keith Hinchliffe). Education Economics is publishing a special issue to mark this occasion and the contributions of Professor Psacharopoulos. The focus of this special issue is research on the returns to education. Research on international comparisons and /or  returns to education in less developed economies are especially welcome.