Investments in Early Childhood Education: Important Protection Against Risk of Poverty in Germany

The publication of the government's Report on Poverty and Wealth has sparked a discussion how poverty in Germany can be fought. One central element of the discussion is the demand for improvements in education for children who left school with very bad results or do not have a school certificate at all due to an unfavourable family environment or disadvantageous material conditions. Analyses conducted by the education economist Dr. Friedhelm Pfeiffer at the Centre for European Economic Research (ZEW), Mannheim, show that this approach does not reach far enough.

"Abilities that represent an important basis for a child’s success at school and in the job market later on are already built up in the early childhood, especially in the sphere of the family", explains Dr. Friedhelm Pfeiffer in his article that has recently been published on page 3 of the ZEWnews April edition (German only).

Pfeiffer’s latest research results indicate that additional investments during pre-school age significantly increase future incomes, especially of children who grow up in an unfavourable family environment. His analyses also show that investments at early ages ensure the highest benefits.

Additional investments in the abilities and competences of children up to the age of five which are financed by taxes, not only improve their future income and their chances in the labour market, but also have a positive impact on the lifetime earnings of certain generations that are part of today’s workforce. Pfeiffer’s calculations show, that especially young workers can expect increased lifetime earnings due to additional investments in pre-school education from 2008 onwards. His study is based on the finding that investments in early childhood education especially promote non-cognitive skills such as persistence in solving problems, discipline, concentration or motivation, which are of great importance for educational and occupational attainment, for a good income and a steady employment history. This also affects the general prosperity: Steady employment histories and higher incomes, for example, lead to steady and increasing contributions to the social systems.

The complete findings of the study are available as ZEW Discussion Papers No. 08-001 and 08-010 (German only).

Contact

PD Dr. Friedhelm Pfeiffer, Phone: +49 (0) 621/1235-150, E-mail: pfeiffer@zew.de