Education Funding

Pitting Preschoolers against Students

Well, at least I won't have to pay for college if I get in. Source: DPA
Well, at least I won't have to pay for college if I get in.
  • Why it matters

    Why it matters

    Studies show children receiving more educational support early on earn more over their lifetimes.

  • Facts


    • Germany recently passed a law guaranteeing a day-care spot to all children over two.
    • The country need needs 120,000 extra preschool teachers.
    • German public universities have all abolished tuition fees.
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Emil is enjoying his favorite meal at his day care center: spaghetti with tomato sauce. But while he sits alone at a table shoveling in fork after fork of noodles, other five-year-olds giggle nearby as they eat together.

Emil is hyperactive and has attention deficit disorder, so teachers isolate him to ensure he doesn’t distract the other children. He often has to paint and even play alone, because there’s no one to spend extra time with him. Unfortunately the scene at the Düsseldorf day care center isn’t that unusual in Germany, which has a dearth of qualified preschool teachers.

According to a study by the German education ministry, 72 percent of preschool teachers suffer from job-related stress and around a third are considered in danger of getting burnout syndrome. Making matters worse, salaries normally start at around €26,000 ($32,000) and the job offers very few career advancement opportunities. So it’s hardly surprising that the country needs 120,000 extra preschool teachers – which would cost some €5 billion annually. However, Germany only spent €19.5 billion overall on public preschools, day cares and kindergartens last year.

Such financial dire straits are nowhere to be seen just a few kilometers away, where the University of Düsseldorf is building a new biology department for €154 million. German universities are better funded now than they have been for decades. And the Bundesrat, the upper house of parliament that represents Germany’s 16 federal states, is enabling the federal government to pump billions more into the country’s higher education system.

Germany invested €117 billion in education, including kindergartens, schools, vocational training and universities in 2013. That’s almost 70 percent more than in 2000. Over the same time period, the number of people age 30 and under in Germany decreased from 28 million to 24 million.

“It’s not that there’s too little being invested in education. The money is simply going to the wrong places,” says Axel Plünnecke, an economist at the Cologne Institute for Economic Research.

Studying at university has become a largely cost-free endeavor in Germany.

A study by the Nobel Prize winner James Heckman a few years ago showed that a child’s educational success depends much more on what happens at the kindergarten than at the university.

Friedhelm Pfeiffer from the Centre for European Economic Research in Mannheim found that if funding for children under six was raised by 10 percent, their lifetime earnings would increase by up to 14 percent. A similar increase for children up to 11 only boosts income by 9 percent.

“This investment pays off for the state in the end,” Mr. Pfeiffer says. “For example, in the form of lower welfare expenditures for people who can’t find work without this investment.”

But further investment in preschool care is nowhere to be seen. The government’s main goal last year was merely to provide more spots for children over two even if the quality of care dropped. Part of the problem is that education policy is left to Germany’s states, making it harder for the federal government to control how federal funds are used.

And the extra money still isn’t enough to keep better-earning parents from having to pay monthly fees of up to €460 for public day care centers.

It’s quite a contrast to public German universities, which have all abolished tuition fees over the past five years. Studying has become a largely cost-free endeavor in Germany. The country has recently invested €32.6 billion in universities – a third more than it did in preschools – even though there are only 2.6 million students compared to 2.8 million preschoolers.

Education economist Mr. Plünnecke considers the discrepancy outrageous.

“There is currently a real imbalance between what has to be paid privately for kindergarten and college. Theoretically it needs to be the other way around,” he says.

His colleague from Munich’s Ifo Institute Ludger Wössmann agrees.

“It can’t be that those profiting most are already the most privileged. Rather we should be redistributing education investment to the smallest,” he said.

The government has realized, at least, that there’s a problem. German Family Minister Manuela Schwesig held a summit with her state colleagues in November to discuss improving day care quality. But that won’t help little Emil much. He might suffer even more from the chronic underfunding of preschools early next year, as teachers are planning on going on strike for more money.


This article originally appeared in WirtschaftsWoche. To contact the author:

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