Recent research into the development and acquisition of early literacy skills has conclusively shown that rhythm and rhyme play a hugely important role. This is because children's early literacy skills are about listening and speaking rather than reading and writing. These first two skills are the bedrock foundation for the latter, and create much stronger ability in the latter if ingrained deeply and early on.
In days gone by it was second nature for parents to sing nursery rhymes, chants and songs to their babies, dangling them on the knee, bouncing them up and down and inventing actions and silly games to accompany them. But according to this research, many children are no longer hearing these nursery rhymes as often (or if they do, just a very few) and therefore not benefiting in the same way as they once were. During my 10 years of teaching 5 year olds, I met many who had never heard or sung a single nursery rhyme in their lives, and indeed had been spoken to very little at all.
A report about this topic in the US found that in 1945 a typical child had a vocabulary of 10,000 words, compared to the 2,500 average of today. It concluded that many of the literacy problems faced by today's children are due to the fact that they are not memorising rhymes and stories in the way that they once were. [See this link for more information about this research.]
What's so great about rhyme? => http://bit.ly/l0dsNn