Study: Germany could benefit from investing in disadvantaged children

Children growing up in poverty or with limited access to education contribute an estimated €216,500 ($242,900) less to Germany's public finances over their lifetimes than those raised without such disadvantages, according to a study commissioned by UNICEF Germany.

The study, conducted by the German Economic Institute (IW), found that a person in Germany contributes an average of more than €300,000 more in taxes and other payments than the state spends on them over their lifetime.

The balance varies significantly with educational attainment. People with university degrees generate an estimated net contribution of €943,000, while those with vocational qualifications contribute €117,600. For those without a recognized professional qualification, the balance is negative by €377,100, the study found.

Axel Plünnecke, the IW economist who conducted the research, said the findings highlighted the economic benefits of supporting disadvantaged children through measures such as all-day schools and family centres.

Childhood health also plays a role. People who maintain healthy habits from an early age, including eating fruit and vegetables and exercising regularly, contribute more than €130,000 more to public finances on average than those with less healthy childhood habits. Depression can result in a negative fiscal balance of up to €345,500, Plünnecke said.

Overall, a child growing up in poverty contributes an estimated €216,500 less to public finances over their lifetime. Plünnecke said better support could help disadvantaged children become more successful adults, pay more taxes and rely less on welfare, an increasingly important consideration as Germany's ageing population puts pressure on public finances.

More than 1 million children in Germany grow up in difficult circumstances, according to UNICEF. Around 65,000 young people leave school without qualifications each year.

"We must stop viewing spending on children purely as a cost," said Georg Graf Waldersee, head of UNICEF Germany. Investing in disadvantaged children was not only a matter of fairness but also made economic sense, he said.