The Role of Parental Investments for Cognitive and Noncognitive Skill Formation – Evidence for the First 11 Years of Life

Skill gaps often arise already immediately after birth and increase during childhood long before formal education starts. Thus, early family environment can explain a crucial part of skill heterogeneity among individuals during childhood and adolescence and has a significant influence on the human capital accumulation across the whole life cycle. Medical and psychological studies have shown the existence of critical and sensitive periods in the formation of skills. If a child does not receive the appropriate stimulation during a critical period, it may be very difficult to develop certain functions later in life. Additionally, during sensitive periods, opportunities to attain certain skills exist which do not exist in subsequent periods. This has important implications for developing educational policies and the optimal timing of human capital investments. This study examines the impact of parental investments on the development of cognitive, mental and emotional skills during childhood using data from a 20-year longitudinal study, the Mannheim Study of Children at Risk, starting at birth. We find empirical evidence for sensitive and critical periods of cognitive and mental skills within the first eleven years of life. This implies that parental investments are most efficient for both types of skills directly after birth and less efficient at age eight and turn ineffective later on. We find that cognitive skills are most important for predicting school success, followed by mental skills, while emotional skills are less important. Our results indicate that initial conditions matter throughout childhood and that organic risk (e.g. low birth weight) is more detrimental for the development of cognitive skills, while psychosocial risk (e.g. early pregnancy) is more detrimental for the development of mental and emotional skills regarding the effect of parental investments. We also find differences between girls and boys considering the effect of parental investments. Boys profit more from parental investments in terms of cognitive skill development, while their mental skill development is more independent. Girls, on the other hand, benefit more from high investments with respect to their mental skill development.

Coneus, Katja, Manfred Laucht and Karsten Reuß (2010), The Role of Parental Investments for Cognitive and Noncognitive Skill Formation – Evidence for the First 11 Years of Life, ZEW Discussion Paper No. 10-028, Mannheim.