Deep-seated capabilities formed in early childhood, a period of dramatic growth and need for intensive interaction with an "invested adult", may have long-term implications for human development and personality. Human capital research analyzes the relationship between initial risk conditions (from the organic and the psychosocial dimension), investments and ability development to gain an understanding of the formation of competence, both from an economic and a psychological point of view. Our contribution to this burgeoning multidisciplinary literature on individual development is twofold. First, we present economic models of ability formation with unique data from a developmental psychological approach for the first time. The data are taken from the Mannheim Study of Children at Risk (MARS), an epidemiological cohort study that follows 384 children from birth to adulthood. MARS provides detailed psychometric and medical assessments as well as psychological expert ratings on various child outcome measures. We study data from infancy to adolescence with variables on initial risk conditions, on cognitive and motor abilities, as well as on persistence, a noncognitive ability. Second, we analyse the relationship between economic and socio-emotional home resources and the development of abilities, and investigate the predictive power of abilities acquired at preschool age for children’s achievement at school age. This should deepen the understanding of competence formation from both an economic and a psychological perspective. Results indicate that differences in abilities at infancy increase until adolescence, while there is a remarkable stability in the distribution of the economic and socioemotional home resources during childhood. Initial organic and psychosocial risk conditions trigger a cumulative effect. Persistence fosters cognitive abilities and school achievement. Basic abilities at preschool age significantly predict social competencies and school grades. Higher basic abilities at primary school age and higher home resources predict a higher-track secondary school attendance. Growing up in an unfavourable socio-emotional family environment impedes the development of basic cognitive and motor abilities. The disadvantage continues until school age, an important stage for noncognitive ability formation. Disadvantaged children are impeded again when the transition to higher-track secondary school attendance takes place. At this stage, economic resources create an additional barrier. We conclude that investment during preschool age bolsters children’s cognitive and noncognitive abilities and improves school achievement. Economic support at school age is needed in addition to enter a higher-track secondary school. Future research on competence formation needs to focus on the variety of parental care and its interaction with individual development.

Blomeyer, Dorothea, Katja Coneus, Manfred Laucht and Friedhelm Pfeiffer (2008), Initial Risk Matrix, Home Resources, Ability Development and Children's Achievement, ZEW Discussion Paper No. 08-100, Mannheim. Download


Blomeyer, Dorothea
Coneus, Katja
Laucht, Manfred
Pfeiffer, Friedhelm


Initial Conditions, Home Resources, Intelligence, Persistence, Social Competencies, School Achievement.