Out-of-school children cost Asia billions in lost GDP: DHL report

  • Economic analysis found that some of Asia's fastest-growing economies lose up to 2 percent of their GDP due to children failing to complete secondary education
  • Report suggests that educating parents about the opportunities of continued schooling is the most effective way to retain students

DHL, the world's leading logistics company, recently commissioned a report looking into out of school children in Asia, and the effect this has had on those economies. A Way Back to School shows Asia could be losing nearly US$34 billion per year in GDP due to children dropping out of school. The report supports the company's GoTeach program which delivers a range of educational and vocational opportunities to young people in disadvantaged communities in seven Asia Pacific countries.

According to the report, some of Asia's fastest-growing economies may struggle to reach their full potential due to high rates of out-of-school children, with some countries deprived of up to 2 percent of their GDP as a result. Out-of-school rates in all seven countries here -- Bangladesh, India, Indonesia, Malaysia, the Philippines, Thailand and Vietnam -- rose exponentially as children grew older, with at least one in every three children dropping out of school by upper secondary-age.

"While everyone recognizes the social importance of keeping children in school, the economic costs of failing to do so may come as a shock to many," said Christof Ehrhart, Executive Vice President of Corporate Communications and Responsibility, Deutsche Post DHL Group. "The Asia Pacific region cannot rely on its rapid economic growth to automatically improve social outcomes like school retention. Although India's economy is growing at around 7 percent per annum,[1] over 28 percent of its children exit at secondary level, while Indonesia -- where economic growth has helped halve poverty levels since 1999[2] -- still sees 1 in 5 students drop out of school by lower secondary age.

If Asia's public and private sectors do not take concerted action to reduce the rates of out-of-school children, the region's most promising economies may soon face a significant talent shortage that could limit the speed of their future growth and development."

"History has proven that countries can only sustain their economic growth when it translates into greater education and innovation amongst the labor force," said Dr. Pumsaran Tongliemnak, Policy Analyst, Ministry of Education Thailand, who authored the report. "Countries which fail to adequately tackle the issue of out-of-school children will either hit a ceiling to their GDP growth, or experience greater instability due to an increasing divide between out-of-school children and those who stay in school."

The report's findings suggest that poverty remains the most common cause of children exiting school before completion, typically to provide additional sources of income for their families. Improving parental awareness of the benefits of completing secondary education -- which include wage premiums of up to more than 44 percent in Bangladesh, for example -- tend to result in higher rates of students staying in school than other traditional measures like grants and subsidies. According to the report, schools catering to the special needs of low-income or disadvantaged students also contribute significantly to reducing out-of-school levels.

"Our investigation confirms that most children who drop out of school in Asia Pacific do so out of economic necessity, whether to earn a wage or because of an inability to afford the high costs of staying in school," said Ehrhart. "We can address this in two ways: by demonstrating the long-term benefits of education to income levels, and by offering young people greater opportunities to develop employability and life skills in and around the classroom."

DHL's GoTeach program operates in all the seven countries examined in the report, delivering a range of educational and vocational opportunities to young people in disadvantaged communities. Working in partnership with global non-governmental organization (NGO), Teach for All, GoTeach educational activities benefited nearly 11,000 children in Bangladesh, India, Malaysia and the Philippines in 2017. At the same time, the GoTeach partnership with global NGO SOS Children's Villages saw DHL employees spend more than 2,000 hours mentoring, training and providing internship opportunities to youths in Indonesia, Thailand and Vietnam. With the GoTeach program, DHL contributes meaningfully to the United Nations' 2030 Agenda for Sustainable Development and specifically to the Sustainable Development Goals number 4 (quality education) and 17 (partnerships for the goals).

"Our latest report hammers home the sheer volume of out-of-school children in Asia, and the rising costs of doing nothing," said Ehrhart. "If we want to tackle this issue in a meaningful way, private-sector CSR efforts must collaborate far more cohesively with NGOs and governments, investing in measures like parental awareness and special schooling infrastructure with proven effectiveness. We have both a window of opportunity and a responsibility to the next generation of Asia's young people to do so before it's too late."

Full report:

DHL -- The logistics company for the world

DHL is the leading global brand in the logistics industry. Our DHL family of divisions offer an unrivalled portfolio of logistics services ranging from national and international parcel delivery, e-commerce shipping and fulfillment solutions, international express, road, air and ocean transport to industrial supply chain management. With about 350,000 employees in more than 220 countries and territories worldwide, DHL connects people and businesses securely and reliably, enabling global trade flows. With specialized solutions for growth markets and industries including technology, life sciences and healthcare, energy, automotive and retail, a proven commitment to corporate responsibility and an unrivalled presence in developing markets, DHL is decisively positioned as "The logistics company for the world".

DHL is part of Deutsche Post DHL Group. The Group generated revenues of more than 57 billion euros in 2016.

About the Author

Dr. Pumsaran Tongliemnak is a Policy Analyst at the Bureau of Policy and Strategy, the Office of the Permanent Secretary, Ministry of Education in Thailand. He has worked with several international organizations such as the World Bank, the Asian Development Bank, UNESCO, and UNICEF in the areas of education policy research. He also teaches part-time at several universities in Thailand. Dr.Tongliemnak has received a BA in Economics from Thammasat University, MPP from the University of Chicago, MA in Economics, and PhD in Economics of Education from Stanford University.

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