1. 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

2. “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)

3. Dimensions of Human Capital

4. Dimensions of Human Capital
cognitive
skills
mobility
non-cognitive skills
Friedhelm Pfeiffer

5. The “Technology” of Lifelong Learning
Skills acquired in one period are available in later periods (self-productivity, recursive productivity)
Skills acquired in one period enhance the returns of later investments (direct complementarity)
Sensitive or critical periods (evidence form other disciplines: neurobiology, developmental psychology)
Early investments yield the highest returns
Further investment is necessary („lifelong learning “)
Friedhelm Pfeiffer

6. Determinants of Lifelong Learning
Genetic endowment
Mother, family background
Peer groups
Educational institutions
Firms
Labor market
Friedhelm Pfeiffer

7. Cognitive Skills Memory of the brain, speed of information processing
General capacity of solving problems
Mathematical knowledge, etc..
roughly 80 % of the cognitive skills are formed up to the age of six years (or even earlier)
Family background is crucial
Friedhelm Pfeiffer

8. Non-cognitive skills Motivation Social Integration
Self-regulation („delay of gratification“, „resistance to distraction“)
roughly 70% of non-cognitive skills are acquired in the first 20 years
Family background and schooling are crucial
Friedhelm Pfeiffer

9. Cognitive and Non-cognitive Skills over the Life Span/ Interventions
900
900
450
450 8 16 24 32 40 48 56 64 72 80 8 16 24 32 40 48 56 64 72 80
Age [years]
Age [years]
Basis
Impulse 0 to 6
Impulse 12 to 18
Impulse 45 to 51
Friedhelm Pfeiffer

10. A Population of Heterogeneous Individuals
Cognitive skills
Non-cognitive skills
1,000
1,000
750
750
500
500
250
250 8 16 24 32 40 48 56 64 72 80 8 16 24 32 40 48 56 64 72 80
Age (years)
Age (years)
99. Perzentil
90. Perzentil
75. Perzentil
50. Perzentil
25. Perzentil
10. Perzentil
1. Perzentil
Friedhelm Pfeiffer

11. Returns to Investments in Skills of Individuals from Favourable or Disadvantaged Environments
High cognitive skills
Low cognitive skills
1,000
1,000
500
500 8 16 24 32 40 48 56 64 72 80 8 16 24 32 40 48 56 64 72 80
Age [years]
Age [years]
Basis
Impulse 0 to 6
Impulse 12 to 18

12. Mobility Law of increasing reductions in regional distance costs
Occupation
Employer/ Firm
Activity/ Job
Highest mobility after finishing school
The availability of attractive jobs is important
Mobility explains roughly 40% of the variance of wages
Friedhelm Pfeiffer

13. Skill Formation over the Life Span

14. Simulation Model
Cognitive skills = f (cognitive skills in the previous period, non-cognitive skills in the previous period, investment, learning ability, depreciation)
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)
Friedhelm Pfeiffer

15. Skill Formation over the Life Span
Human Capital
80,000 €
60,000 €
40,000 €
20,000 €
0 € 8 16 24 32 40 48 56 64 72 80
Age [years]
Basis
Impulse 0 to 6
Impulse 12 to 18
Friedhelm Pfeiffer
Impulse 45 to 51

16. Equality of Opportunity and Lifelong Learning
Equality of opportunity has deep roots in Europe (for example French Revolution , Martin Luther : access to education for all)
Social partnership is important
Significant variation of educational institutions and the role of social partnership in European countries
Friedhelm Pfeiffer

17. The Heterogeneity of Skills in Europe
Source: OECD (2006), own calculations
Friedhelm Pfeiffer

18. Impacts of Training Programs for Adults
Target population and program dose (intensity)
Indirect undesired effects sometimes large
The effects of government educational programs for adults sometimes are ambitious (alternatives should be discussed)
Friedhelm Pfeiffer

19. Policies to Foster Lifelong Learning

20. Two sides of one coin: lifelong learning and technical progress
Fostering mobility after finishing school, social partnership and the creation of work
Labour market competition due to migration and globalization
Neurobiology: childhood is crucial for the ability of lifelong learning
Friedhelm Pfeiffer

21. Thank you for your attention!