Quantifying the Life-Cycle Benefits of an Influential Early-Childhood Program

Jorge Luis García, James J. Heckman, Duncan Ermini Leaf, María Prados

Journal of Political Economy · 2019 · 224 citations · 47 references

DOIFull text

Open access

TL;DR

This paper serves as a template for synthesizing experimental and nonexperimental data with economic theory to estimate long‑run life‑cycle benefits of social programs. The study quantifies and aggregates the lifetime benefits of a high‑quality early‑childhood program measured through midlife. Using economic theory, the authors combine experimental and nonexperimental data, forecast life‑cycle benefits and costs, and conduct extensive sensitivity analyses to account for estimation and forecasting error. The internal rate of return is estimated at 13.7%, yielding a benefit‑to‑cost ratio of 7.3.

Abstract

This paper quantifies and aggregates the multiple lifetime benefits of an influential high-quality early-childhood program with outcomes measured through midlife. Guided by economic theory, we supplement experimental data with nonexperimental data to forecast the life-cycle benefits and costs of the program. Our point estimate of the internal rate of return is 13.7%, with an associated benefit/cost ratio of 7.3. We account for model estimation and forecasting error and present estimates from extensive sensitivity analyses. This paper is a template for synthesizing experimental and nonexperimental data using economic theory to estimate the long-run life-cycle benefits of social programs.

References

47