Child-care needs weigh on parents' back-to-school plans: Goldman Sachs

Reggie Wade
·Writer

According to an analysis by Goldman Sachs, child care needs have prevented many parents from working.

School closures indirectly weigh on employment and productivity by increasing child care needs, which Goldman found caused a large increase in worker absences. “Single parents, workers that cannot work from home, and parents with young children are more at risk of not working due to child care needs. We estimate that roughly 24mn workers, or 15% of the labor force, are in at least two of these three situations,” the report said.

Children together at modern school
Children together at modern school

Single parents, parents with younger children, and parents with less ability to work from home are more likely to either be absent from work or to drop out of the labor force altogether due to child care needs, according to Goldman.

“In addition to these short-run economic costs, school closures may also have many other important long-run costs. These include negative effects of lower-quality education, the lack of social and emotional skill development, increased rates of depression and anxiety, food insecurity, worsening income inequality if lower-income households are less able to work from home, and worsening educational inequality if poorer households have less access to remote learning. While many of these costs are not immediate in nature, they may have very important and long-lasting societal consequences,” Goldman stated.

According to Goldman, employment in the education services has caved across the education field in both private and public sectors. In March and April, there was a 22.2 decline in nonfarm payrolls. As a result of school shutdowns, the education industry contributed 1.2 million of the 22.2 million decline in nonfarm payrolls in March and April.

Despite the economic data pointing towards an in-person reopening of schools benefiting the workforce and economy, many parents, students, and teachers alike have concerns about the potential threat of contracting COVID-19. However, the Trump administration continues to push for in-person school reopenings as U.S. COVID-19 cases continue to rise.

While Goldman notes the evidence is preliminary and far from conclusive, some studies from countries outside the U.S. do provide some optimism.

“A large study based on comprehensive contact tracing in South Korea found that children under 10 were roughly half as likely as adults to transmit the virus to others, while children between the ages of 10 and 19 transmitted the virus at similar rates to adults.”

However, Goldman also notes that recent CDC study found large outbreaks in a Georgia summer camp even for younger children, while another recent study has shown that children may carry high viral loads.

Goldman highlighted five countries that have reopened schools amid the pandemic — Belgium, Denmark, France, Germany, and Israel. Among those nations, only Israel saw a spike in COVID-19 cases.

“Many countries have reopened schools successfully as judged by the overall number of new cases, with the notable exception of Israel. Very importantly, however, these countries had relatively low local infection rates when reopening schools. In contrast, the U.S. currently has a much higher level of daily new infections nationwide and in many states, with nearly 200 daily cases per million in the U.S. compared to 20 daily cases per million or less for most countries that reopened schools.”

Most of the countries that have reopened schools amid the pandemic have taken an extremely cautious approach. Some of the safety measures taken include limiting class sizes, mask-wearing requirements, and spacing between desks, among other restrictions, according to Goldman.

However, Goldman notes that Israel quickly returned to full classes of up to 40 students per class with few restrictions after an initial phased return. Because of this, the country has had to later close several schools, the study found.

“These anecdotes suggest that any reopening of schools in the U.S. should be done by cautiously following public health guidelines.”

Reggie Wade is a writer for Yahoo Finance. Follow him on Twitter at @ReggieWade.

Read more:

Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, and reddit.