The Economic Impact of School Closures in Malaysia - Abel Benjamin Lim, Fariq Sazuki, Benedict Weerasena, Carmelo Ferlito
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CME Policy Brief No. 1
June 2021
The Economic Impact of School Closures
in Malaysia
Abel Benjamin Lim, Fariq Sazuki,
Benedict Weerasena, Carmelo Ferlito
Photo by MChe Lee on Unsplash
Abel Benjamin Lim
Economist at Bait Al-Amanah, Malaysia.
Fariq Sazuki
Economist at Bait Al-Amanah and
Fellow of the Center for Market Education, Malaysia.
Benedict Weerasena
Economist at Bait Al-Amanah and
Fellow of the Center for Market Education, Malaysia.
Carmelo Ferlito
CEO of the Center for Market Education, Malaysia.
2 The Economic Impact of School Closures in Malaysia
CME Policy Brief No. 1
Executive Summary
The Pandemic known as Covid-19 has come to affect the Malaysian
education system, which was already suffering from several problems,
mainly as a result of centralization.The policies implemented by the
Malaysian Government to attempt to curb the spread of the virus
– namely, the closures of educational institutions, and in particular
schools, associated with several lockdowns – have heavily weighed
on the Malaysian society and life. The present paper addresses the
most critical effects of school closures on the Malaysian socio-
economic system, proposing a list of policy prescriptions for a safe
return to face-to-face education.
Main findings:
• School closures seem to be a disproportionately heavy measure
in addressing the spread of Covid-19 as the number of Covid
deaths among individuals at school age is extremely low (for
example, current mortality statistics illustrate that 0.02% of the
total Covid-19 deaths in Italy and 0.04% in the United States
of America) and therefore the risk can be minimized with less
radical measures.
• According to the relevant scientific literature, school closures
have not been proved to be significantly important in containing
the spread of the virus.
• The enforced closing of schools, however, instead are a source
of heavy cost. First of all, in terms of educational losses in
the learning process: even in an optimistic scenario of high
effectiveness of remote learning relative to classroom learning,
Malaysia’s learning losses comprises a low rate of loss of 0.45
years (5.4 months). However, in the pessimistic scenario,
Malaysia has the highest learning losses across all the Asian
developing countries surveyed, with an alarming rate of loss of
0.95 years (11.4 months). It has to be stressed that learning is
only one part of the larger scope of education, which includes
social interactions among peers and the dynamic relationship
between teachers and pupils.
The Economic Impact of School Closures in Malaysia 3
• School closures are extremely regressive, as they affect
mostly families in which both parents must work and
most Malaysian families are those with an inferior degree
of accessibility to electronic devices and proper internet
coverage.
• From the economic perspective, school closures could
cost, in terms of GDP losses, RM 80 billion per year;
in other words, each year of disrupted physical school
operations will cost Malaysia the equivalent to 33.3 days
(1.11 months) of MCO 1.0-type lockdown or 114.3 days
(3.81 months) of MCO 2.0-type lockdown. Under the
current scenario, whereby it seems that hiccup education
will last three years, the expected total future loss in terms
of GDP is RM 240 billion.
• This will be reflected also in terms of future expected
earning losses. Each year of disrupted physical school
operations could bring an expectedeconomic loss per
worker of between RM 464.26 and RM 1,121.95. For
individuals with a degree, such a loss could reach up to
RM 2,054.24 per year.
Policy recommendations:
• Given such a trade-off analysis, we advocate for an
immediate reopening of schools.
• The gold standard for a safe reopening is given by an
activity of mass and frequent covid-screening, which
means testing each student every Monday; this approach
would allow early detection and the isolation of positive
cases, preventing asymptomatic contagions and the
development of heavy symptoms.
• The program could be financially sustainable thanks to the
introduction of rapid testing, whose efficacy is discussed
in the paper.
4 The Economic Impact of School Closures in Malaysia
CME Policy Brief No. 1
• The limited cost of a program based on rapid testing (USD
5/test) could easily be borne by schools and families, while
the government should provide subsidies only for real
poverty situations.
• We call for an immediate interruption of generalized
policies, where future school closures should be decided on
a case by case and on the grounds backed up by scientific
evidence. In this regard, engagement with health officials is
crucial.
• Education authorities must consider an inclusive approach to
reduce the disparities between students once schools begin
reopening, addressing the inequality created by lockdowns
and school closures.
• As a final measure, creative measures should be introduced
in order to keep schools open; among them, creating larger
spaces, outdoor schooling, protective bubbles and effective
communication.
The Economic Impact of School Closures in Malaysia 5
1. Introduction
Even before the COVID-19 pandemic hit Malaysia in early 2020,
there were already so many issues with the Malaysian education
system. For example, the problem of centralisation of education
has always been a a matter of big debate within Malaysia. The
fact that the Ministry of Education (MOE) oversees all schooling
decisions makes it challenging for policymakers to find a one-
size-fits-all set of policies for each school from Sabah to Perlis.
The perilous and unbalanced weight of scientific disciplines over
(properly taught) humanities is yet another source of concerns.
The is because the lack of humanities compromises the possibility
for critical thinking for students and therefore innovative minds to
emerge. As a result, the pace of change in our education system
has been insufficient, because people in the Federal Government
tend to not to understand the needs and challenges on the ground.
Besides that, despite having a high percentage of enrolment in
tertiary education and of university graduates, the unemployment
of the youth is still a huge problem in Malaysia. In 2020, the estimated
youth unemployment was 11.72 percent, which is the highest since
the oldest available data in 1999. This high figure cannot be fully
attributed to the pandemic, because the unemployment of the
youth has been around 11 percent and rising since 2015 (O’Neill,
2021).
The findings of several studies demonstrate that the unemployment
of the youth may stem from the inadequacy of Malaysian educational
governance policies. Our schools’ concentrated emphasis on
examinations over cognitive skills, critical thinking, and creative
reimagination has not prepared students for higher education and,
ultimately, for the job market. Eventually, this problem will cause a
structural mismatch between demand and supply in the Malaysian
labour market.
6 The Economic Impact of School Closures in Malaysia
CME Policy Brief No. 1
Photo by Haseeb Modi on Unsplash
Now, in the current scenario where the Covid pandemic is creating
an economic crisis in Malaysia, the education crisis worsens. Since
COVID-19 has arrived in Malaysia in early 2020, our education
policies have been exposed and the outcomes to be more
problematic than we realized. The uncertain decision surrounding
the reopening of schools has created distress among students,
teachers, and parents during the Movement Control Order
(MCO). This policy uncertainty has also caused long-term damage
to students’ educational growth and thus, the labour market in the
future.
At this moment, the government has decided to indefinitely replace
in-school education with remote learning as a new standard policy,
which is shown to discriminate amongst students based on their
socioeconomic backgrounds. The remote learning option would
be convenient for students with a personal electronic device
(either a smart telephone or a laptop) and a strong, stable Internet
connection. Unfortunately, not every child in Malaysia enjoys this
privilege, effectively causing further learning inequality among our
students based upon household income levels.
The Economic Impact of School Closures in Malaysia 7
Furthermore, while we recognize the role that new technologies
play in the new world, and we embrace the need for mastering
them, despite the challenges posed by the recent Covid-19
emergency and the call for a more widespread use of remote
learning. We also believe that a comprehensive education cannot
be supplied without the fundamental interrelation between
teachers and students. The word education comes from the Latin
educationis, the activity of educare, which means “to pull out, to
extract”. It is thus clear that education does not exist without the
virtuous relationship between a pupil and a master, who has the
delicate task to pull out of the pupil his or her best features, helping
her or him in the discovery process of their very individual self. If
education was only the transmission of notions, then we would
not need schools and teachers at all, we could just supply students
with learning materials. Instead, beyond the contents, the mission
of education is precisely the hand-in-hand growth path that pupils
and masters make together. For this reason, the role of teachers
needs to be emphasized and they need to be trained according to
the cruciality of their mission.
Therefore, while it is bad that Malaysia is facing a serious health
pandemic at the moment, there is another severe problem that
the government should worry about, which is the potential of mass
learning loss due to school closures and irregular education policies.
This grave situation cannot be neglected any longer because it
affects the future generation of Malaysians1.
1
We recognize that there are other socio-economic problems linked to school closures. For example, families where both parents need to work are disproportionately more
affected in terms of family financial and mental stability. However, this topic would deserve adequate treatment with a different paper and therefore it will not be discussed at
length here.
8 The Economic Impact of School Closures in MalaysiaCME Policy Brief No. 1
2. Current Impact of
School Closures
2.1. School closures and Covid-19 containment
The first element that we should consider about is the choice of
closing or opening schools during the Covid-19 pandemic, should
there be a clear the demographic of Covid-19, in Malaysia. While
we do not have an accurate series of data for the demographics of
Covid-19 deaths in Malaysia (and the Center for Market Education
is building it2), we can refer, as an accurate reference sample, to the
case of Italy, one of the countries that was more severely hit by
the pandemic. Since the beginning of 2020 until 28 April 2021, the
Italian Istituto Superiore della Sanità (the Italian equivalent of CDC)
recorded 118,592 people dead and positive to the SARS-CoV-2
virus; among them, and only 24 were individuals between 0 and
19 (school age), or 0.02% of the total (ISS, 2021). Similarly, in the
United States of America, as per January 27, 2021, when the total
Covid-19 deaths were 448,3133, only 207 (0.046%) were among
subjects aged 0-184. These figures suggest a very low vulnerability
to Covid-19 for individuals in school age, so that different policies
should be preferred in lieu to school closures, as suggested in the
last part of the present paper.
The second consideration to be made is – after 15 months from
the start of the pandemic outbreak – whether school closures
have played a role in fighting the spread of Covid-19. Viner et al.
(2020) used data from the SARS pandemic and concluded that
school closures did not contribute to the control of the epidemic;
in particular, during the SARS outbreak school closures outbreak
in China, Hong Kong and Singapore may have contributed to
preventing only 2 to 4% of deaths.
2
Preliminary results from the last 270 Covid-19 deaths in Malaysia show that, among them, only 1 subject was in school age; she was a three-year old child suffering from
leukaemia.
3
https://www.worldometers.info/coronavirus/country/us/
4
https://www.cdc.gov/coronavirus/2019-ncov/science/science-briefs/transmission_k_12_schools.html
The Economic Impact of School Closures in Malaysia 9Photo by Kelly Sikkema on Unsplash
Similarly, the findings of von Bismarck-Osten, Borusyak and
Schӧnberg (2021) provided evidence from Germany that school
closures did not contain the number of infections among young
people or adults in the summer of 2020 – when infection rates
were low – or during the pandemic’s autumn resurgence. Thus –
they concluded – the benefits of school closures may not outweigh
their costs to children and parents, particularly mothers, who will
find daily life more challenging in order to maintain the balance
between family and work.
The conclusions are confirmed for the case of Sweden by the study
done by Vlachos, Hertegård and Svaleryd (2021), who however
warned about the higher risk for teachers, which therefore should
be protected.
10 The Economic Impact of School Closures in MalaysiaCME Policy Brief No. 1
2.2. Loss of Educational Learning
As a result of school closures and the effectiveness of remote learning strategies implemented in
2020, the average intermediate learning losses5 incurred in Malaysia is 0.66 years or 7.9 months,
according to the Asian Development Bank (2021a, p. 10). In fact, Malaysia’s average learning
losses is ranked second only to Myanmar in the Southeast Asian region.
In the optimistic scenario6 of comparative effectiveness of remote learning relative to classroom
learning, Malaysia’s learning losses is a lower 0.45 years (5.4 months). However, in the pessimistic
scenario7, Malaysia has the highest learning losses across all the Asian developing countries
surveyed, with an alarming rate of loss of 0.95 years (11.4 months), as shown in Figure 1 below.
Figure 1:
Malaysia’s learning losses in the pessimistic scenario are the highest across Asian developing countries.
Source: Asian Development Bank (2021a).
5
Learning losses are calculated using the two components of learning-adjusted years of schooling (LAYS): the expected years of schooling (EYS) and harmonized test scores
(HTS), where LAYS = EYS × HTS.The length of school closures reduces average EYS (quantity effect). However, its effect on EYS is mitigated by the effectiveness of remote
learning strategies. Besides this, school closures reduce harmonized test scores (HTS) (quality effect) by as much as the country’s average school productivity or what students
learn in 1 year of going to school (Azevedo et al., 2021).
6
No significant difference in student performance between online and face-to-face teaching (Paul and Jefferson, 2019), based on internet access, access to television, the
comparative effectiveness of television relative to online learning, and the relative shares of students undergoing online and television-based learning.
7
Pessimistic scenario estimates that distance learning over a 12-month period causes a learning penalty of 7 months if students receive remote instruction of lower quality
(42% effectiveness) (Dorn et al., 2020).
The Economic Impact of School Closures in Malaysia 11The learning losses in the pessimistic scenario are alarmingly
high. However, there are many factors which justify the relative
ineffectiveness of online or remote learning when compared with
face-to-face teaching in Malaysia, which contributed to the high
learning losses.
2.3. Challenges faced by teachers and students
The first consideration to be made at this regard is that many
teachers in the initial stages of the first movement control order
(MCO) faced substantial difficulties, including limited access to
efficient applications and the lack of supporting technological
infrastructure as well as stable internet connections. In addition,
the limitations posed by the virtual classroom inhibit personal
interaction, which then reduces the teachers’ ability to fully meet
the needs of students and the necessary engagement required for
improved comprehension of concepts. Furthermore, teachers had
to deal with additional stressors arising from the ambiguity of their
roles, challenges in virtual class management and exhaustion from
teaching online.
The second consideration, the challenges students faced affected
the effectiveness of remote learning. For instance, the lack of stable
connectivity, especially in rural areas, and the overall lack of access
to devices in general. A Ministry of Education survey performed
in April 2020 involving 670,118 parents and 893,331 students
revealed that 36.9% of students do not possess or have any access
to devices, while only 6% of students had personal computers,
5.76% had tablets, 9% had laptops and 46% had smartphones
(Ong, 2020).
12 The Economic Impact of School Closures in MalaysiaCME Policy Brief No. 1
School closures certainly has disproportionate impacts on students from financially vulnerable
households, worsening long-term socio-economic inequality. Challenges faced among students
from lower-income families include limited access to technology and connectivity, in addition to
the lack of a conducive environment to learn effectively. As many schools implemented real-time
learning, many underprivileged students missed out due to unavailability of their parents’ devices
during the scheduled lessons. The main reasons contributing to the ineffectiveness of online
lessons among lower income urban households is shown in the Figure 2 below.
Figure 2: Students from lower-income urban households face multiple challenges of online learning.
Online learning not accessible to children with disabilities 2%
Cannot get access to the free 1GB internet access for education 7%
No Internet 12%
Child does not want to learn 14%
Internet connection not stable
22%
No laptop, computer or tablet 23%
I cannot supervise my children to learn /
Children need face-to-face interaction with teachers 43%
Children are not able to concentrate because there are no places to study 49%
0 10 20 30 40 50
Source: UNICEF (2021).
Besides these factors, the burden of adapting to the new learning model in isolation, in addition
to the uncertainty affecting academic performance has taken a huge toll on the mental health of
students. A survey done of 958 students across 16 universities in Malaysia revealed that 31.1%
were experiencing moderate anxiety, while a worrying 26.1% experienced severe anxiety (Irfan
et al., 2020).
Furthermore, face-to-face extra-curricular activities in schools cannot be replicated online.
The cancellation of most of these activities inhibits peer socialization and impedes the holistic
development of real-world skills including self-confidence, leadership, teamwork, problem solving,
analytical and creative thinking, among others.
The Economic Impact of School Closures in Malaysia 132.4. The rate of students dropping out of school
The dropout rates among school-going children at primary and
secondary levels in Malaysia have registered a slight increase in
2020. As of November 2020, the primary school dropout rate
increased from 0.12% to 0.13%, while the dropout rate for
secondary school students increased from 1.14% to 1.26% during
the pandemic (Malaysiakini, 2020). More alarmingly, nearly one fifth
of the 500 urban poor families surveyed revealed that their children
had lost interest in schooling since the movement control order
(MCO) was imposed, with 7% of upper secondary students opting
not to return to classes (UNICEF, 2020). All in all, the impact that
these student dropouts are more likely to face is future economic
hardship, social stigma, fewer job opportunities and lower salaries.
3. Future Impact Of
School Closures
3.1. An overview of the need for quality education
for a brighter future
The uncertainty posed by school closures will inevitably disrupt the
advancement to new education levels and institutions. It is essential
for everyone to have opportunities to access education. The SDG
repeatedly expresses the importance of ensuring access to and
completion of quality education for all children and youth, besides
promoting lifelong learning opportunities. Amid the coronavirus
pandemic, accessibility to equitable quality education and learning
must be strategized appropriately. Education is about being
holistic. Human personality is shaped in the development of one’s
educational pathway. As UNESCO (2019) pointed out, it is for the
promotion of understanding, tolerance, friendship and peace.
14 The Economic Impact of School Closures in MalaysiaCME Policy Brief No. 1
The former Secretary-General of The United Nations, Ban Ki-
moon, expounded that education is a fundamental right and the
foundation for progress in every country (UNESCO, 2015). This
is in line with health and nutrition, skilled and educated workers,
sustainable development and climate change, partnership and
Former Secretary-General collaboration. The country develops more progressively with the
of The United Nations, greater number of individuals receiving quality education. All the
Ban Ki-moon
17 SDGs are in relation to education. Using SDG-1 No Poverty as
© www.cas2021.com
an example, the prevention of poverty to be transmitted between
generations and the ability to escape chronic poverty births from
education. Education is the enablement for paid formal employment
to earn higher wages.
A notable 2020 report, Towards Universal Access to Higher
Education: International Trends, explained that enrolment into
higher education has doubled in the last two decades – 19%
to 38% between the years 2000 and 2018 (IESALC, 2020). In
Southeast Asia, the percentage stood at 45% in 2018 and we are
soon reaching 50%. This evidence clearly signals more universal
access to tertiary education. Notably, Malaysia should formulate
policy recommendations to include the excluded and discriminated
groups, combining academic provision with psychological and
financial support. The report indicated that, “an increase in
university enrolment tends to coincide with the increase in
GDP per capita” (IESALC, 2020). With that, there is a need to
address learning and access to higher education as education is
seen as the catalyst for a country’s development and social justice
reconciliation. A fair distribution of educational opportunities
should also be part of the equation and keeping schools open
would create a sustainable education.
The Economic Impact of School Closures in Malaysia 15Photo by Kelvin Zyteng on Unsplash
3.2. Future economic and social impact
How would the closing of schools widen the gap in learning, thus
causing an economic impact? The losses in educational learning
amongst students will lead to losses in potential earnings, disruption
of work productivity and skills, as well as lifetime earnings. The
Asian Development Bank (ADB) Outlook (2021b) presented an
estimated loss at $1.25 trillion present value for developing Asia,
which is equal to 5.4% of the region’s gross domestic product
(GDP) in 2020.
For Malaysia, this means a yearly GDP loss of around
RM 80 billion8; such a loss is almost equivalent to the total GDP loss
recorded between 2019 and 2020 (-5.6%; Department of Statistics
Malaysia, 2021). Therefore, the losses produced by school closures
weigh on Malaysia’s economic performance like another year of
Covid-19 pandemic and related lockdowns. We can conclude
that each year of school closure and educational disruption
is adding a GDP loss equivalent to the ones recorded during
the first year of Covid-19. If, as it seems likely, school disruptions
may last until the end of 2022, this would produce GDP losses
equivalent to RM 240 billion.
8
Ministry of Finance (2020, p. IX) estimated, for 2021, a GDP of around RM 1,450,830 million.
16 The Economic Impact of School Closures in MalaysiaCME Policy Brief No. 1
To put it in other terms, each year of school closure and educational disruptions will
cost Malaysia like 33.3 days (1.11 months) of MCO 1.0-type lockdown (whose estimated
losses were RM 2.4 billion per day; Lee, 2021) or 114.3 days (3.81 months) of MCO 2.0-type
lockdown (whose estimated losses were RM 700 million per day; Lee, 2021).
The report further explained that «a person’s earnings increase with more years of schooling».
Averagely, the loss of each schooling year is equivalent to 9.7% less in potential learnings. In
Southeast Asia, every student affected by school closures will lose an estimated $167 on a
yearly basis. This value is equal to 1.9% decline in average annual earnings as shown in
Table 1 (Asian Development Bank, 2021b). This means that, by conservatively estimating school
disruptions for three years, Malaysian future workers can have earnings almost 6% lower
than the current level.
Table 1: Due to school closures, losses in earnings per student per year in Southeast Asia is $167.
Losses in earnings per student per year, % decline in earnings Baseline average
current $ per student per year earnings per
worker per year,
Subregion Optimistic Intermediate Pessimistic Optimistic Intermediate Pessimistic current $
Central Asia 39 56 78 1.1 1.6 2.2 3,552
East Asia 332 771 1,344 1.7 4.0 7.0 19,182
South Asia 68 78 92 3.5 4.0 4.7 1,948
Southeast Asia 105 167 247 1.2 1.9 2.9 8,663
The Pacific 30 42 58 0.5 0.6 0.9 6,509
Developing Asia 99 180 286 1.3 2.4 3.8 7,637
Source: Asian Development Bank (2021b).
In Table 2, the same estimation is done with reference to Malaysia.
Table 2: Estimated losses in earnings per student per year in Malaysia.
Average % Decline in earnings per student year
Losses in earnings per students per year
Yearly Salary Optimistic Intermediate Pessimistic
General Average RM 38,688.00 RM 464.26 RM 735.07 RM 1,121.95
No Certificate RM 21,120.00 RM 253.44 RM 401.28 RM 612.48
SPM and below RM 28,164.00 RM 337.97 RM 535.12 RM 816.76
1.20% 1.90% 2.90%
STPM/Certificate RM 35,052.00 RM 420.62 RM 665.99 RM 1,016.51
Diploma RM 45,072.00 RM 540.86 RM 856.37 RM 1,307.09
Degree RM 70,836.00 RM 850.03 RM 1,345.88 RM 2,054.24
Source: Our elaborations on data from Dzulkefli (2020).
The Economic Impact of School Closures in Malaysia 17Using the parameters introduced by the Asian Development Bank
and basing our analysis on the Malaysia’s average earnings per
worker in 2019, we estimate that each year of school closure and
educational disruption could bring to a loss per worker of between
RM 464.26 and RM 1,121.95. For individuals with a degree, such a
loss could reach up to RM 2,054.24 per year.
The United Nations (2020), in a policy brief, further confirmed the
impact on education workforce remuneration and employment,
based on the Education International survey report. The ripple
effect caused that goes beyond education loss itself will likely
contribute to higher earning gaps, as presented in the UN report.
Also, the loss in working hours represent around 400 million full-
time jobs (statistics from the International Labour Organization).
When the COVID-19 pandemic hit, institutional learning was
affected indirectly through income shocks. Notably, the economic
downturn forced many into a state of poverty with increasing rate
of unemployment and decreasing incomes. The ADB estimated
that 162 million more people in developing Asia will live below
the poverty threshold of $3.20 a day. Certainly, the number of
households who are unable to continue supporting their children’s
education will see an increase. Also, knowing that the indirect
effects caused by the pandemic will hinder children from going to
schools, especially those in the B40 and underprivileged groups.
Consequently, the closure of schools will add on to the learning
losses described and reduce future productivity and lifetime
earnings.
Against this backdrop, Malaysia has used alternative learning options
to make up for the learning loss. The remote learning modes
adopted are through online platforms, television and take-home
packages, but not radio-related learning methods.With the adoption
of online technologies, more cost will be incurred as a result of
the need for greater consumption of communication technology
tools, internet connectivity, special training for educators, and the
18 The Economic Impact of School Closures in MalaysiaCME Policy Brief No. 1
Photo by Thomas Park on Unsplash
necessary equipment and resources to receive learning such
as computer, internet access, mobile device, television, space
and other forms of home-based technology support.
The Delve Initiative Report (2020) further reiterated the
disruption of skills with the closing of schools. It is
estimated that a quarter of the labour market in the UK
will experience lower skills beyond 2080 due to the learning
losses incurred during the lockdown. This will lead many
young people into losing out on critical skills and growth
in the future. Future generations will face severe negative
economic consequences with the increase in the loss of
learning as «earning levels are directly linked to education
and skills». Even so, it depends on the provision that schools
and families have, taking the requirements imposed on them
to support the various ways of remote learning, which
determines the actual loss of learning. Children from different
socioeconomic backgrounds will be impacted with greater
existing inequalities due to this gap in provision. Surely every
student will be impacted by the closure of schools, but
children from vulnerable and lower socioeconomic groups
will face a much worse effect.
The Economic Impact of School Closures in Malaysia 19The OECD 2020 report confirmed that economies with a less
skilled labour force will experience lower economic growth and
that will negatively impact the whole welfare of society (Hanushek
and Woessmann, 2020). In a knowledge-based economy, education
equips people with the necessary skills which in return increases
productivity. The disruption of learning will hinder the transmission
of knowledge and skills to enhance and apply new ideas and
innovations.This results in slow economic growth and technological
progress. An average of about 10% higher income is associated
with each schooling year, as stated in the report.
A school is a place for children to go to be educated. Unavoidably,
any closure of schools will also elevate associated social costs, even
more so for the vulnerable and marginalised groups.Various aspects
of their lives will be deeply impacted, knowing the already existing
inefficiencies, disruptions and disparities within the education
system. UNESCO (2021) pointed out the closing of schools will
deprive growth and development opportunities for children and
youths, especially with the underprivileged learners trapped in the
lack access to educational opportunities beyond school.
Ultimately, we need to ensure that children and youths have the
adaptability to return and stay in school once the closure is lifted.
A school is a social hub for human interaction and social/curricular
activity. An essential and experiential learning comes from the value
one receives via social contact. Learning from peers within the
school environment would create a better vibrancy of learning
culture, which encourages the learning of knowledge, the application
of skills and the instilling of values. Schools have to be rooted in
the society as an entity to understand and advance intellectual,
scientific and artistic knowledge to everyone. Start by opening the
doors for students, educators and parents to enter, and provide
continuous teaching and learning.
20 The Economic Impact of School Closures in MalaysiaCME Policy Brief No. 1
4. Policy
Recommendations
At this point, the government’s paramount focus should be on
the mechanism to prevent learning losses from becoming a
generational disaster to our labour market in the future. Certainly,
this decision very much depends on current health circumstances.
However, our main suggestion is that schools should be reopened,
so that children can have a proper space for education as well as
personal growth. Hence, the action recommendation proposed by
this study is in support for school reopening in Malaysia.
Given the demographic of Covid-19 related deaths, it seems that
schools are indeed the places where something more can be
risked in terms of going back to normality. The trade-off analysis
here presented points in the direction of the necessity to reopen
schools, with the suggestions that are given below.
4.1. Mass testing
The gold standard for a safe reopening of schools under the current
vaccination path can only be mass testing. Our way to see this is
more radical than the usual way in which it is conceived; in fact,
we have in mind not simply testing a large number of individuals
(students, in this case), but to work in order to achieve the possibility
of testing all students at the beginning of each school week (on
Monday). Such a method would allow officials to detect infections
at an early stage and to isolate positive subjects before they have
either chance to extensively spread the disease and develop severe
symptoms.
Early detection, in fact, is key if we want to properly tackle the
spread of the virus. At the current stage of research, the prevalence
of asymptomatic cases is not precisely established. Despite early
studies reported that asymptomatic cases accounted for 30 to 80%
The Economic Impact of School Closures in Malaysia 21of infections, more recent data suggest a rate of asymptomatic cases between 17
and 30% (Rasmussen and Saskia, 2021, p. 1206). With regard to the infectivity
of symptomless individuals, instead, the findings of various sources of data are
quite conflicting: while one study suggested that at least 65% of transmissions
occurs prior to the onset of symptoms, another one recorded only 12.6% of
cases resulting from asymptomatic transmission (Rasmussen and Saksia, 2021, p.
1206). These elements are making more it difficult to implement measures of
an effective widespread prevention. Such a challenge can be moderated only by
scaling up testing activity.
However, to step up activity, in terms of testing, it is necessary to adopt a change in
perspective with regard to the tests themselves. The clinical tests currently being
used are designed for use with symptomatic people, they are not cheap (and
they do not need to be), while they require high analytical sensitivity to return a
definitive clinical diagnosis (Mina, Parker and Larremore, 2020, e120(1)). Instead,
to properly fight asymptomatic spread, tests need to produce results quickly, to be
cheap and easy to execute. (Mina, Parker and Larremore, 2020, e120(1)-e120(2)).
As explained by Mina, Parker and Larremore (2020, e120(2)-e120(3)):
By several criteria, the benchmark standard clinical polymerase-chain-reaction
(PCR) test fails when used in a surveillance regimen.
[…]
For an effective Covid filter that will stop this pandemic, we need tests that can
enable regimens that will capture most infections while they are still infectious.
These tests exist today in the form of rapid lateral-flow antigen tests, and rapid
lateral-flow tests based on CRISPR gene-editing technology are on the horizon.
Such tests are cheap (CME Policy Brief No. 1
Figure 3 here below makes the point.
Figure 3: High-Frequency Testing with Low Analytical Sensitivity versus Low-Frequency Testing with High
Analytical Sensitivity.
Source: Guglielmi (2021, p. 203).
In the graph, a person’s infection trajectory (blue line) is shown in the context of two
surveillance regimens (circles) with different analytic sensitivity. «The low-analytic-sensitivity
assay is administered frequently and the high-analytic-sensitivity assay infrequently. Both
testing regimens detect the infection (orange circles), but only the high-frequency test
detects it during the transmission window (shading), in spite of its lower analytic sensitivity,
which makes it a more effective filter. The window during which polymerase chain reaction
(PCR) detects infections before infectivity (green) is short, whereas the corresponding
postinfectious but PCR-detectable window (purple) is long» (Mina, Parker and Larremore,
2020, e120(2)).
Furthermore, since the uncontrolled spread drives new strains, mass testing with rapid
tests would reduce opportunities of the virus to mutate and improve our ability to detect
emerging strains quickly. Such ability remains crucial since we cannot wait for the vaccination
rollout to be completed and since the efficacy of the current vaccines on the new strains
is yet to be proven (Sparrow, 2021).
A population-wide rapid antigen testing has been used in Slovakia in late 2020.The observed
prevalence decreased by 58% within one week in the 45 counties that were subject to two
rounds of mass testing; the figure, when adjusted for an epidemic growth of 4.4% per day
preceding the mass testing campaign, increased to 70% (Pavelka et al., 2021).
The Economic Impact of School Closures in Malaysia 23Medical photo created by freepik -
www.freepik.com
The Rockefeller Foundation (2020, p. 15) was also advocating for
mass testing as the key element in order to keep schools, workplaces
and communities open, recognizing that the development of rapid
tests is key for an effective and affordable screening. Furthermore,
among the strong advocates for mass and rapid testing we find
Economics Nobel Laureate Paul Romer, who clearly explained
how we should indeed move toward weekly testing and isolating
those who are tested positive while allowing the others to get back
to normal lives (Romer and Garber, 2020; Chotiner, 2020). This is
the best way for achieving targeted immunity and avoid further
economic losses.
An objection may be raised about the potential cost of the
program. In Malaysia there are around 2.7 million students enrolled
in primary schools and a little more than 2 million in secondary
schools, for a total of around 4.7 million students9. Taking the lower
estimation of the rapid cost test – USD 5 (RM 20.7) – the mass
testing project would have a cost of USD 23.5 million (RM 97
million) per week, and the amount for school employees then
needs to be added. However, we are not advocating here for a fully
subsidized program, quite the contrary. With regards to private and
international schools, we believe that it would not be difficult to
convince schools and parents to financially support the program.
This is because international school fees in Malaysia range between
approximately RM 15,000 and RM 100,000 per year (Prior, 2019),
which means a regular cost of between RM 1,250 and RM 8,500
9
MOE 2019 Quick Facts, elaborated by Bait Al-Amanah House of Trust.
24 The Economic Impact of School Closures in MalaysiaCME Policy Brief No. 1
per month. The rapid test cost of RM 20.7 per week, or RM 82.8
per month, would represent an increase between 6.6% and 0.97%
per month. With these figures in mind, it is not difficult to imagine
that schools and parents would easily be able to participate in
the program (with parents paying for their children and schools
paying for their staff), while the government could focus in only
supporting mass testing with a subsidy for those situations in which
affordability is really an issue.
4.2. Other recommendations
There are other general considerations which would help justify
a safe reopening of the schools. First of all, the school reopening
decision should be constantly monitored and evidence-based, so
that it alleviates both health and safety as well as education
concerns. One blanket general policy for the totality of schools
should be avoided. Education authorities should engage with key
officials and significant stakeholders, such as parents, teachers,
and school administrations to identify the learning losses and the
educational gaps that can be addressed when schools reopen. For
instance, reopening of preprimary and primary schools should be
prioritized because the returns to early childhood education are
the highest (Asian Development Bank, 2021a).
Secondly, engagement with health officials is crucial as they can
counsel authorities on the reopening of schools by using scientific
evidence as a base to mitigate the risks of COVID-19 transmission.
To expedite schools reopening while curbing the spread of virus,
health authorities should enforce strict health and sanitary protocol
in schools as well as faster vaccination for students, school staff,
and even parents (but always on a voluntary basis, recognizing that
early testing remains the gold standard to avoid infections).
Thirdly, education authorities must consider an inclusive approach
to reduce the disparities between students once schools
begin reopening. Socioeconomic inequality has become a serious
problem during the pandemic, causing educational inequality
among students. Upon reopening, schools should use simple and
The Economic Impact of School Closures in Malaysia 25quick diagnostic tools to assess each student’s learning gap from
other students.Then, school curricula and examinations must adapt
to remedy any losses and pick up where students have left off.
On the non-academic side, schools should also include strategies
for marginalized students, such as providing adequate health and
nutritional assistances. In order to do this, the government should
emphasize educational recovery as much as health recovery in their
proposed economic stimulus packages (United Nations, 2020).
Finally, in addition to the existing established health measures
set by the Ministry of Health, the following is a list of practical
precautionary suggestions for each school:
(i) If available, schools should convert additional space into
larger classrooms to maintain safe physical distancing among
students and teachers.
(ii) If facilities cannot be expanded, consider staggered daily
calendars for different students to avoid crowding.
(iii) Students should be grouped together in protective bubbles,
where each group stays together throughout the school day
and cannot mix with other bubbles.
(iv) Schools must ensure transparent communication lines with
health officials.
The government must be aware that unprecedented situations,
namely the coronavirus pandemic, can occur, and during those
times the existing education policies are lacking and can cause a loss
of learning in the long run. Therefore, this crisis is an opportunity
for Malaysia to reimagine its education system and to improve the
level of resilience in our students’ education.
26 The Economic Impact of School Closures in MalaysiaCME Policy Brief No. 1
5. Conclusions
Covid-19 came to affect the Malaysian education system, which was
already suffering from several problems, mainly due to centralization
issues. The policies implemented to try to curb the spread of the
virus – namely, the school closures associated to several lockdowns
– has heavily weighed down on the Malaysian society.
It seems, however, that these measures were not necessary,
first and foremost because the number of Covid deaths among
individuals in school age is extremely low and therefore the risk
can be minimized with less radical measures; secondly, because
school closures have not been proven to be significantly important
in containing the spread of the Covid-19 virus.
While producing very limited advantages, the enforced closing of
Schools, however, instead are a source of heavy cost. First of all,
in terms of educational losses in the learning process: even in an
optimistic scenario of high effectiveness of remote learning relative
to classroom learning, Malaysia’s learning losses comprises a low
rate of loss of0.45 years (5.4 months). However, in the pessimistic
scenario, Malaysia has the highest learning losses across all the Asian
developing countries surveyed, with an alarming rate of loss of 0.95
years (11.4 months).
Furthermore, school closures are extremely regressive, as they
affect mostly families in which both parents must work and most
Malaysian families are those with an inferior degree of accessibility
to electronic devices and proper internet coverage.
From the economic perspective, school closures could cost, in
terms of GDP losses, RM 80 billion per year; in other words, each
year of disrupted physical school operations will cost Malaysia the
equivalent to 33.3 days (1.11 months) of MCO 1.0-type lockdown
or 114.3 days (3.81 months) of MCO 2.0-type lockdown.
The Economic Impact of School Closures in Malaysia 27This will be reflected also in terms of future expected earning losses.
Each year of disrupted physical school operations could bring an
expected economic loss per worker of between RM 464.26 and
RM 1,121.95. For individuals with a degree, such a loss could reach
up to RM 2,054.24 per year.
Given such a trade-off analysis, we advocate for an immediate
reopening of schools which should be accompanied by a planned
implementation of mass and frequent testing, which means testing
each student every Monday of each week. This approach would
allow the early detection and isolation of positive cases, preventing
the asymptomatic contagions from spreading through the student
bodies of schools. The limited costs of the program could easily
be borne by schools and families, while the government should
provide subsidies only for real poverty situations.
We call for an immediate interruption of generalized blanket school
closure policies, where future school closures should be decided
on case by case and on the grounds of scientific evidence. In this
regard, engagement with health officials is crucial.
Education authorities must consider an inclusive approach to
reduce the disparities between students once schools begin
reopening, addressing the educational and financial inequalities
created amongst students and families by government lockdowns
and school closures in Malaysia.
As a final measure, creative measures should be introduced in order
to keep schools open; among them, better use of larger spaces,
outdoor schooling, protective bubbles and effective communication.
28 The Economic Impact of School Closures in MalaysiaCME Policy Brief No. 1
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The Economic Impact of School Closures in Malaysia 31We pride ourselves as an independent research institution conducting studies and research to help improve policy and decision-making process through sound, independent, and multidisciplinary research and analysis. Our main objective has always been to provide valuable insights and disseminate research findings for the benefit of the public. We achieve this not just through our research, but also by promoting dialogue with leaders, thinkers, and citizen to address key issues faced by Malaysian to develop new perspectives and fresh ideas. We also provide consultancy focused on client’s core issues and opportunities through a holistic perspective. 32 The Economic Impact of School Closures in Malaysia
CME Policy Brief No. 1 The Economic Impact of School Closures in Malaysia 33
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