World Bank report says Caribbean youth employment declined sharply during the pandemic

WASHINGTON,  CMC – A new World Bank report says youth employment in Latin America and the Caribbean declined sharply during the COVID-19 pandemic. 

The COVID-19 pandemic caused “a massive collapse in human capital at critical moments in the life cycle, derailing development for 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. 

The report, “Collapse and Recovery: How COVID-19 Eroded Human Capital and What to Do About It”, analyses global data on the pandemic's impacts on young people at key developmental stages: early childhood (0-5 years), school age (6-14 years), and youth (15-24 years). 

It finds that today's students could lose up to 10 per cent of their future earnings due to COVID-19-induced education shocks. 

The report also finds that the cognitive deficit in today's toddlers could translate into a 25 per cent decline in earnings when these children are adults. 

“Human capital—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 report says. “Yet the pandemic shuttered schools and places of employment and disrupted other key services that protect and promote human capital, such as maternal and child health care and job training.” 

In Latin America and the Caribbean (LAC), data shows a sharp decline in youth employment. 

The report says these declines were particularly pronounced at the beginning of the pandemic in Brazil and Mexico, with a 6 per cent and a 7 per cent decline.

But, by the end of 2021, the report says youth employment had recovered fully and even exceeded pre-pandemic levels in both countries. 

For school-age children, the study finds that between March 2020 and March 2022, an average child lost about one year of in-person schooling due to school closures.

In Latin American and the Caribbean, the report finds that children lost 1.7 years due to particularly long school closures. 

“Furthermore, the youngest children experienced COVID-related service disruptions while still in utero, as their mothers prepared for their births,” the report says. 

For example, it says relative to the levels observed in 2019, births taking place in a health care institution fell by more than 25 per cent in Haiti. 

“Regionally, the pandemic worsened an ongoing decline in vaccine coverage rates for children, especially among the poor,” the report says. 

“School closures, associated lockdowns and disruptions in services during the course of the pandemic threatened to wipe out decades of progress in building human capital,” said World Bank Group President David Malpass. “Targeted policies to reverse the losses in foundational learning, health and skills are critical to avoid jeopardising the development of multiple generations.

“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 added. 

Due to the pandemic, the study finds preschool-age children in multiple countries have lost more than 34 per cent of learning in early language and literacy and more than 29 per cent of learning in math, compared to pre-pandemic cohorts. 

In many countries, even after schools had reopened, preschool enrolment had not recovered by the end of 2021, the report says, adding that it was down by more than 10 percentage points in multiple countries. 

The report says children also faced greater food insecurity during the pandemic. 

“COVID-19 dealt a heavy blow to youth employment,” the report says, stating that “40 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.”

The report says youth earnings contracted by 15 per cent in 2020 and 12 per cent in 2021. 

It says new entrants with lower education will have 13 per cent less earnings during their first decade in the labour market. 

“People under the age of 25 today—that is, those most affected by the erosion of human capital—will make up more than 90 percent of the prime-age workforce in 2050,” said Norbert Schady, chief economist for Human Development at the World Bank, and a lead author of the report. 

“Reversing the pandemic's impact on them and investing in their future should be a top priority for governments,” he added. “Otherwise, these cohorts will represent not just a lost generation but rather multiple lost generations.” 

The World Bank said it is working closely with Caribbean and other governments to protect and invest in people as they cope with and recover from the pandemic. 

The World Bank said its pandemic response financing reached US$72.8 billion between April 2020 and June 2022.

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

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