Quantifying the Life-Cycle Benefits of a Prototypical Early Childhood Program
54 Pages Posted: 5 Jun 2017
This paper quantifies the experimentally evaluated life-cycle benefits of a widely implemented early childhood program targeting disadvantaged families. We join experimental data with non-experimental data using economic models to forecast its life-cycle benefits. Our baseline estimate of the internal rate of return (benefit/cost ratio) is 13.7% (7.3). We conduct extensive sensitivity analyses to account for model estimation error, forecasting error, and judgments made about the empirical magnitudes of non-market benefits. We examine the performance of widely used, ad hoc estimates of long-term benefit/cost ratios based on short-term measures of childhood test scores and find them wanting.
Keywords: childcare, early childhood education, life-cycle benefits, long-term forecasts, rates of return
JEL Classification: J13, I28, C93
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