Quantifying the Life-Cycle Benefits of a Prototypical Early Childhood Program

54 Pages Posted: 5 Jun 2017

See all articles by Jorge Luis García

Jorge Luis García

affiliation not provided to SSRN

James J. Heckman

University of Chicago - Department of Economics; National Bureau of Economic Research (NBER); American Bar Foundation; Institute for the Study of Labor (IZA); CESifo (Center for Economic Studies and Ifo Institute)

Duncan Ermini Leaf

University of Southern California - Schaeffer Center for Health Policy and Economics

María Prados

University of Southern California

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Abstract

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

Suggested Citation

Garcia, Jorge Luis and Heckman, James J. and Ermini Leaf, Duncan and Prados, Maria, Quantifying the Life-Cycle Benefits of a Prototypical Early Childhood Program. IZA Discussion Paper No. 10811. Available at SSRN: https://ssrn.com/abstract=2979958

Jorge Luis Garcia (Contact Author)

affiliation not provided to SSRN

James J. Heckman

University of Chicago - Department of Economics ( email )

1126 East 59th Street
Chicago, IL 60637
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773-702-0634 (Phone)
773-702-8490 (Fax)

National Bureau of Economic Research (NBER)

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American Bar Foundation

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Institute for the Study of Labor (IZA)

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CESifo (Center for Economic Studies and Ifo Institute)

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Munich, DE-81679
Germany

Duncan Ermini Leaf

University of Southern California - Schaeffer Center for Health Policy and Economics ( email )

635 Downey Way
Los Angeles, CA 90089-3333
United States
213-821-6474 (Phone)

Maria Prados

University of Southern California ( email )

635 Downey Way
Los Angeles, CA 90089-3332
United States

HOME PAGE: http://www-bcf.usc.edu/~prados/index.html

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