Improving the education levels of impoverished children would greatly increase their future income potential and save the government trillions of yen, a Tokyo-based research team said Thursday.
Researchers at the Nippon Foundation and Mitsubishi UFJ Research and Consulting Co. conducted an income simulation on 180,000 15-year-olds living on welfare, in child welfare institutions, or with a single parent.
If their high school entrance and drop-out rates improved to the levels of children in wealthier households and their matriculation rates were 22 points higher, their collective income until the age of 64 would increase by ¥2.9 trillion, the researchers said.
Meanwhile, the financial burden on the government would be reduced by ¥1.1 trillion in the same period because those with higher income pay more taxes and social security premiums, the simulation noted.
"It has now become clear that poverty problems for children have a great impact not only on social issues, but on the economy as well," the group said in a press release.
While the simulation did not factor in the public cost of improving the academic performance of children in poverty, it is useful because it shows the theoretical economic impact of taking action to help children improve in school, the researchers said at a news conference in Tokyo.
For the simulation, the researchers assumed that a stronger academic background raises one's chances of becoming a regular, permanent corporate employee, which is usually accompanied by higher incomes plus benefits.
The team said male high school graduates who become non-regular workers will on average earn ¥140 million over their lifetimes and pay ¥46 million in taxes and social security premiums.
In the meantime, male college graduates who become regular, permanent workers will earn an average of ¥290 million in their lifetimes and pay ¥150 million in taxes and social security premiums, they said.