Education and Equal Life-Chances: Investing in Children

Two core features of the new economy conspire to raise ever higher the human capital requisites for life-chances. First, and almost by definition, knowledge-intensive economies push up the skills premium. The returns to education are rising, and the less skilled are falling behind in the earnings distribution. Gone are the days when a semi-skilled ‘standard production worker’ could count on stable employment and good wages. The probability of unemployment — and especially long-term unemployment — doubles or even triples among workers with less than secondary-level education (OECD 2001). It is a pretty safe guess that youth with poor cognitive skills or inadequate schooling today will become tomorrow’s precarious workers, likely to face a life-time of low wages, poor-quality jobs, and frequent spells of unemployment or assistance dependency. As pension systems move towards career-long earnings for benefit calculations, these same citizens can easily face poverty as they move into retirement.