Early estimates of the impact of COVID-19 disruptions on jobs, wages, and lifetime earnings of schoolchildren in Australia

Abstract

What effects have the Australian COVID-19 disruptions had on our present and future labour force? In the first part of this paper, I document the effects of the disruptions on current jobs and wages in Australia from the March through May period of 2020 – by income level, gender, age, and industry – drawing on the monthly labour force survey and the ABS’s new Weekly Payroll Jobs and Wages in Australia survey. I find that the lockdowns have disproportionately affected both jobs and wages in certain industries, and have been regressive in their substantially different impacts on workers of different ages, with mid-life workers by far the least affected and young workers disproportionately likely to have dropped out of the labour force. I also find that the government’s JobKeeper program is likely to have had a major, if short-term, impact on job preservation and income levels. In the second part of the paper, I draw on state-level data on school closures over the same period to estimate the amount of pupil-days that have been disrupted due to the lockdowns, and then apply standard estimates from the economics of education literature of the correspondence between length of schooling and wages to estimate the wage losses expected to eventuate under different assumptions about how effective online learning is relative to schoolbased learning. Conservative estimates indicate losses of between AUD$50 million and AUD$100 million from coronavirus-related schooling disruptions.

JEL Codes: I2, I3, J2, J3