EU-India Seminar

Reasons and Policies to Promote Lifelong Learning: the EU Experience

Friedhelm Pfeiffer, University of Mannheim & ZEW Mannheim

New Dehli, India 28 November 2006

“The most valuable of all capital is that

invested in human beings;

and of that capital the most precious part is the

result of the care and influence of the mother”

Alfred Marshall (1890, VI.IV.11)

Dimensions of Human

Capital

Dimensions of Human Capital

cognitive cognitive skillsskills

mobilitymobility

Friedhelm Pfeiffer

non-cognitive skillsnon-cognitive skills

The “Technology” of Lifelong Learning

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Sensitive or critical periods (evidence form other disciplines: neurobiology, developmental psychology)

Skills acquired in one period are available in later periods (self-productivity, recursive productivity)

Early investments yield the highest returns

Skills acquired in one period enhance the returns of later investments (direct complementarity)

Further investment is necessary („lifelong learning “)

Determinants of Lifelong Learning

Genetic endowment

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Mother, family background

Peer groups

Educational institutions

Firms

Labor market

Cognitive Skills

Memory of the brain, speed of information processing

General capacity of solving problems

Mathematical knowledge, etc..

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roughly 80 %80 % of the cognitive skills are formed up to the age of

six years (or even earlier)six years (or even earlier) Family background is crucial

Non-cognitive skills

Motivation

Social Integration

Self-regulation („delay of gratification“, „resistance to distraction“)

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roughly 70%70% of non-cognitive skills are acquired in the first 20 20

yearsyears Family background and schooling are crucial

Cognitive and Non-cognitive Skills over the Life Span/ Interventions

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900

450

0

0 8 16 24 32 40 48 56 64 72 80

Basis

Impulse 0 to 6

Impulse 12 to 18Impulse 45 to 51

Age [years]

900

00 8 16 24 32 40 48 56 64 72 80

450

Age [years]

Cognitive skills Non-cognitive skills

A Population of Heterogeneous Individuals Cognitive skills

1,000

750

500

250

0

0 8 16 24 32 40 48 56 64 72 80Age (years)

99. Perzentil90. Perzentil75. Perzentil50. Perzentil25. Perzentil10. Perzentil1. Perzentil

Non-cognitive skills1,000

750

500

250

0

0 8 16 24 32 40 48 56 64 72 80Age (years)

Friedhelm Pfeiffer

Returns to Investments in Skills of Individuals from Favourable or Disadvantaged Environments

High cognitive skills Low cognitive skills

1,000

500

0

0 8 16 24 32 40 48 56 64 72 80

Basis

Impulse 0 to 6

Impulse 12 to 18

Age [years]

1,000

500

00 8 16 24 32 40 48 56 64 72 80

Age [years]

Mobility

Law of increasing reductions in regional distance costs

Occupation

Employer/ Firm

Activity/ Job

Highest mobility after finishing school

Friedhelm Pfeiffer

The availability of attractive jobs is important

Mobility explains roughly 40% of the variance of wages

Skill Formation

over the Life Span

Simulation Model

Cognitive skills = f (cognitive skills in the previous period, non-cognitive skills in the previous period, investment, learning ability, depreciation)

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Non-cognitive skills = g (cognitive skills in the previous period, non-cognitive skills in the previous period, investment, learning ability, depreciation)

Human capital = h (human capital in the previous period, cognitive and non-cognitive skills, depreciation)

Skill Formation over the Life Span

1 1 1C N t 13 3 3

t t 1 t 1 t 1 t 1 H

t 1

HH S S H H

v

Friedhelm Pfeiffer

Human Capital

80,000 €

60,000 €

40,000 €

20,000 €

0 €

0 8 16 24 32 40 48 56 64 72 80Age [years]

Basis

Impulse 0 to 6

Impulse 12 to 18Impulse 45 to 51

Equality of Opportunity and Lifelong Learning

Equality of opportunity has deep roots in Europe (for example French Revolution 1789-1799, Martin Luther 1483-1546: access to education for all)

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Social partnership is important

Significant variation of educational institutions and the role of social partnership in European countries

The Heterogeneity of Skills in Europe

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Source: OECD (2006), own calculations

Finnland Germany Portugal Finnland Germany Portugal

5% 400 295 311 0.73 0.57 0.2810% 437 341 351 0.89 0.74 0.3825% 494 419 418 1.18 1.06 0.6250% 543 491 478 1.46 1.41 0.8975% 599 572 544 1.83 1.85 1.2790% 641 624 592 2.14 2.16 1.6195% 666 652 617 2.33 2.34 1.80

PISA Reading 2003 Human Capital in Million €1€ = 58 Rupie

Impacts of Training Programs for Adults

Target population and program dose (intensity)

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Indirect undesired effects sometimes large

The effects of government educational programs for adults sometimes are ambitious (alternatives should be discussed)

Policies to Foster Lifelong

Learning

Fostering mobility after finishing school, social partnership and the creation of work

Friedhelm Pfeiffer

Labour market competition due to migration and globalization

Two sides of one coin: lifelong learning and technical progress

Neurobiology: childhood is crucial for the ability of lifelong learning

Thank you for your attention!