This paper provides a framework for estimating the economic benefits of early child development (ECD) programs, and applies it to preliminary data from the PIDI project in Bolivia. “Economic benefits” refer first to the monetary value of the benefits in health, nutritional status, and cognitive and social development that accrue to the children who enroll in ECD programs. To these benefits we need to add benefits to the mother and other family members, to the neighborhood in which the children centers operate, and to society as a whole.
A major objective of ECD programs is to prepare young children for enrollment in primary school. Many of the benefits of ECD therefore are realized “through” improved enrollment and schooling achievements of ECD graduates. We take advantage of this in our evaluation. Borrowing from the literature on the economics of education, we will base part of our analysis on the assumption that one of the objectives of ECD programs is to increase children’s chances to become productive citizens. Productivity in this regard is very broadly defined to include productivity in the market place as well as home-production. The latter manifests itself in the relationship between, for instance, higher mother’s education and children’s health and nutrition status.
We will quantify the benefits of increased life-time productivity as a result of ECD enrollment. We will also discuss additional benefits from education, but quantification will prove to be difficult.
Not all benefits of ECD programs are education related. There are direct benefits to the child (e.g. meals provided at the ECD centers), and indirect benefits to society (e.g. greater community participation, or lower future fertility rates). We will try to catalog all benefits but, again, will not always be able to put a dollar value on them.
Based on the benefits we can quantify, our preliminary results for Bolivia show that ECD programs that are (1) well-targeted, and (2) have a major impact on school enrollment and achievement, and are excellent investments from an economic point of view. We will also argue that if one adheres to some modest notion of social justice, ECD programs should be subsidized (or be provided free-of-charge) for those children who are born and grow up in the most deprived segments of society.