This study investigates the importance of different socio-economic conditions on skill formation by
using German data from a longitudinal study, the Mannheim Study of Children at Risk, starting at
birth. A rich set of psychometric variables regarding the socio-emotional environment from birth until
late childhood is assessed. The paper extends previous approaches by splitting up the information on
the environment into several dimensions. The results could help policy makers to design educational
interventions. Birth risk and the early mother-child interaction are the most important determinants in
infancy. In middle childhood cognitive skills can be enhanced by parents who stimulate child play
with appropriate play materials and by parental support in learning numbers, shapes or letters. Personality
rather tends to be linked to a harmonious and motivational parent-child relationship, in particular
a positive emotional climate and the stimulation of independence. Early investments are the
most important, but should be complemented by investments in late childhood to unfold their benefits