Penn Wharton Budget Model analyzes cost of area school closures

A masked teacher crouches down at a desk to talk with a masked student at school.

Since the start of the 2020-21 school year, school districts have operated with various combinations of distance learning and in-person schooling in order to balance the risk of the COVID-19 pandemic against the costs of school closures to families and students.

In response to the recent increasing infection rates across the country, policymakers have been adjusting their school reopening plans.

The Penn Wharton Budget Model (PWBM) recently released a localized analysis of the cost of school closures in Bucks, Chester, Delaware, and Montgomery counties.

Maddison Erbabian, one of the study’s authors and PWBM research associate, explains how the model accounted for costs.

“We localize costs of both school closures and COVID cases by accounting for the continuously evolving school district policies, student enrollment by school district, age distribution of each county, and weekly COVID cases by county,” she says. “We then take these localized costs to conduct our trade-off analysis.”

The PWBM found that the average cost of a new COVID infection in these counties ranges from about $8,000 to $13,000—significantly lower than the national average of $27,230—mainly due to a lower fatality rate.

Youran Wu, another author of the study, spoke on the importance of looking at local conditions.

“We localize our national average COVID cost estimates by using the county-level age distribution, COVID fatality rate, and median wages data,” she says. “The significant difference between those county-level estimation results and the national estimate highlights the importance of using local measurements in the community-level policymaking process.”

Effraim Berkovich, Maddison Erbabian, and Youran Wu
Penn Wharton Budget Model’s Effraim Berkovich, Maddison Erbabian, and Youran Wu.

The PWBM then looked at the trade-off between the cost of infections to the community versus students’ lost future earnings from closing schools, and found that the impact on students’ future earnings far exceeded the cost of COVID to the community.

For example, if Montgomery County had implemented full in-person school in the fall, the costs of infection would have been, at most, $429 million. However, closing schools cost students as much as $4.4 billion in present value of future wages.

Wu cautioned that both estimates are high for their respective costs.

“We assume the increase in the aggregate COVID costs since the beginning of the school year were completely due to school reopenings, says Wu. “This is an overestimate of the effect of school openings since other reopenings, including restaurants and places of worship, among others, occurred simultaneously.”

When the team performed statistical analysis on school openings and COVID costs, it appeared far more likely that these other reopenings played a larger role in the local costs of COVID than school reopenings.

“Our estimate of virtual schooling’s negative effect on one’s future earnings treats it as equivalent to full school closure, although it is likely students receive at least some benefit from virtual schooling,” says Wu. “Nevertheless, our estimates serve as a basis to estimate the education and public health trade-offs local policymakers faced in the fall.”

Additionally, the PWBM found no statistical significance between actual school openness and the costs of COVID. Virtual schooling would have to be almost as effective as in-person schooling in order to justify school closures as a means to reduce the cost of COVID infections.

The primary trend, both nationally and within these counties, has been a declining cost per infection, according to Wu.

“On average, the cost per infection in November was about 50% lower than it was in August. This strong downward time trend shared by the whole country as well as the four counties should be attributed to the nationwide decline in the fatality rate,” she explains. “Breaking it up, we find that while the medical cost and the productivity cost in November remained almost the same as they were three months earlier, the value-of-life cost associated with fatal cases was only about 44% of its August level.”

Graph of columns filled with data titled Comparison of Costs to Full Reopening and to Full Closure
Image: Courtesy of Penn Wharton Budget Model

PWBM classified the level of in-person learning according to an openness index, ranging from 0 to 100, where 0 represents completely virtual schooling and 100 represents completely in-person schooling. The index is calculated from the percentage of students (determined by grade level enrollment by county) who are allowed to attend school and the number of days per week these students are permitted to attend school in person. (The model did not measure realized openness, meaning the percentage of students who actually attended in-person school.)

Erbabian illustrated an example calculation:

“For instance, Rose Tree Media School District in Delaware County reopened its doors on Oct. 5, allowing kindergarteners to attend school five days a week, and 1-12 graders to attend school every other day. This yields an openness index of 53.6 beginning Oct. 5, meaning there is just over half the pre-pandemic level of in-person schooling.”

Local and county-level policymakers make school reopening decisions against the backdrop of COVID-19 infection rates in the area. County health departments in Bucks, Chester, and Montgomery counties have provided guidance for moving to new phases of school openings based on predetermined threshold incidence rates. School boards take both county guidance and local conditions into account when making opening decisions.

County health departments and school boards try to account for a variety of benefits, costs, and interests in their school opening guidance and decisions. There is uncertainty about the potential increase in community infections from a particular operating policy. There is also uncertainty about the resulting distribution of who gets infected.

Efraim Berkovich, director of computational dynamics at the PWBM, headed the study and concluded that school boards and health policymakers “should look at the trade-offs of local costs of COVID versus harms to students and families from being out of school.” Using these cost thresholds provides a transparent, evidence-based approach in the school opening decision, he says.

Projections of positive COVID-19 costs from a full school reopening are no larger than 12% of the loss to future lifetime earnings associated with missed education from a full school closure.

PWBM is a nonpartisan research organization that provides economic analysis of the fiscal impact of public policy, housed at the Wharton School of the University of Pennsylvania.