Child-care support, early childhood education, and schooling

Common proxies, such as years of education, have been shown to be ineffective at capturing cross-country differences in skills acquisition, as well as the role they play in the labor market. A large body of research shows that direct measures of skills, in particular cognitive and socio-emotional ones, provide more adequate estimations of individuals’ differences in potential productive capacity than the quantity of education they receive. Evidence shows that cognitive skills in particular are quite relevant to explain wages, while socio-emotional skills are more associated with labor force and education participation decisions.

The role of social interactions in modifying individual behavior is central to many fields of social science. In education, one essential aspect is that “good” peers can potentially improve students’ academic achievement, career choices, or labor market outcomes later in life. Indeed, evidence suggests that good peers are important in raising student attainment, both in compulsory schooling and university. Interventions that change the ability group composition in ways that improve student educational outcomes without exacerbating inequality therefore offer a promising basis for education policies.

Most OECD countries spend substantially more on maternity leave schemes than on early childcare. However, given high tax burdens and rapidly aging populations, female labor force participation is critically needed. Moreover, it is important to know whether the main beneficiaries, the children themselves, reap more benefits from one or the other in the long term. The first cohorts exposed to the introduction or extension of maternity/paternity leave schemes and subsidized childcare programs have now completed education and entered the labor market, allowing an investigation of these programs’ long-term economic effects.

Reaching the policy goal of improving student achieve­ment by adding resources to the school system has often proven elusive. By contrast, ample evidence indicates that central exit exams constitute an important feature of a school system’s institutional framework, which can hold students, teachers, schools, and administrators accountable for student outcomes. While critics point to issues such as teaching test-only skills, which may leave students ill-prepared for the real world, the evidence does not bear this out. Overall, central exams are related to better student achievement, favorable labor market outcomes, and higher economic growth.

Increasing population age and low fertility rates, which characterize most modern societies, compromise the balance between people who can participate in the labor market and people who need care. This is a demographic and social issue that is likely to grow in importance for future generations. It is therefore crucial to understand what factors can positively influence fertility decisions. Policies related to the availability and costs of different kinds of childcare (e.g. formal care, grandparents, childminders) should be considered and promoted after an evaluation of their effects on the probability of women having children.

In addition to the traditional education system targeting children and youth, one potentially important vehicle to improve literacy and numeracy skills is adult literacy programs (ALPs). In many developing countries, however, these programs do not seem to achieve these hoped for, ex ante, objectives and have therefore received less attention, if not been largely abandoned, in recent years. But, evidence shows that ALPs do affect other important socio-economic outcomes such as health, household income, and labor market participation by enhancing participants’ health knowledge and income-generating activities.

Life skills, sometimes referred to as noncognitive skills or personality traits (e.g. conscientiousness or locus of control—the belief to influence events and their outcomes), affect labor market productivity. Policymakers and academics are thus exploring whether such skills should be taught at the high school or college level. A small portfolio of recent studies shows encouraging evidence that education could strengthen life skills in adolescence. However, as no uniform approach exists on which life skills are most important and how to best measure them, many important questions must be answered before life skill development can become an integral part of school curricula.

Teachers are perhaps the most important determinant of education quality. But what makes a teacher effective? Developing countries expend substantial resources on certifying teachers and retaining those who become certified; moreover, policymakers and aid donors prioritize increasing the prevalence of certified teachers. Yet there is little evidence that certification improves student outcomes. In fact, augmenting a school's teaching corps with contract teachers hired outside the civil service and without formal qualifications may be more effective in boosting student performance.

Compulsory schooling laws are a common policy tool to achieve greater participation in education, particularly from marginalized groups. Raising the compulsory schooling requirement forces students to remain in school which, on balance, is good for them in terms of labor market outcomes such as earnings. But the usefulness of this approach rests with how the laws affect the distribution of years of schooling, and the wider benefits of the increase in schooling. There is also evidence that such a policy has an intergenerational impact, which can help address persistence in poverty across generations.

Skills are widely regarded as being necessary for boosting productivity, stimulating innovation, and creating new jobs, while skill mismatches are often cited as being responsible for a lack of dynamism in the labor market. However, heavy investments in technical and vocational training programs are seldom a “silver bullet.” Recent evidence on skill building not only points to the core importance of foundational skills (both cognitive and social) for success in the labor market, but also emphasizes how jobs themselves can lead to learning and shape social competencies that, in turn, ignite innovation and create more jobs.