The think-tank published research in the summer finding pupils were two to three months behind in their learning compared to pre-pandemic levels, with disadvantaged students falling even further behind.
“The long-run effects of this degree of learning loss are stark,” its new report - released on Thursday - said.
The think-tank said pupils were likely to miss out on £16,000 in earnings due to the impact of the pandemic, which kept pupils at home during lockdowns and periods of self-isolation.
In total, the lost income is estimated to run into the hundreds of billions.
But aside from the economic impact, learning loss is also “likely to affect health outcomes, engagement with civic society and wellbeing”, the EPI said.
“This report presents a grim picture of the substantial learning loss suffered by young people during the course of the coronavirus pandemic,” Julie McCulloch from the Asssociation of School and College Leaders (ASCL) said.
The union’s director of policy said it was also a “clarion call” for the government to announce a “substantial education recovery fund” in next week’s Spending Review.
“This should not come as a surprise to the government because everyone working in education has warned of the potential consequences of underinvestment in our schools and colleges and the knock-on effects for the students directly impacted by the pandemic,” she added.
EPI has called for a £13bn education recovery and resilience package over the next three years, with more funding given to schools in disadvantaged areas and with a larger proportion of children on free school meals.
This is compared to the £3.1bn allocated in current government plans - which the EPI estimates works out at around £310 per pupil in England over four academic years.
In response to the report, Kate Green, the shadow education secretary, said the government’s “woeful recovery offer is falling far short of what’s needed”.
Last month, a report by the Office for National Statistics found remote learning - which schools have relied upon at times during the pandemic, was “at best a partial substitute” for classroom lessons, with schools with more disadvantaged pupils particularly hard hit,
A government spokesperson said: “We have committed to an ambitious, long-term education recovery plan which will deliver world-class training for thousands of teachers and high-quality tutoring for millions of pupils.
“We are significantly expanding the National Tutoring Programme this year, building on the progress from last year when more than 300,000 children benefited, and giving schools more flexibility to deliver tutoring that works for them and their families.”
They added: “This investment in education recovery – of over £3bn to date – comes on top of the £14.4bn this government is investing in schools in total over the three years up to 2022-23, helping young people leave school better educated, better skilled and ready for the world of work.”