Estimating the Internal Rate of Return of the Influential Jamaica Early Childhood Intervention

Abstract

Abstract This article quantifies the economic benefits of an influential early childhood program in a developing country, tracking participants with outcomes measured through age 31 years. Drawing on published experimental data encompassing life-cycle benefits – that rely primarily on available labor-market outcomes – alongside a rigorous cost analysis, we estimate an internal rate of return (IRR) of 10.4–10.7% and benefit–cost ratio of ~8. Even though estimates are not that precise, a variety of sensitivity analyses confirm the robustness of these findings. Notably, we find meaningful gender heterogeneity in returns: females exhibit a higher IRR of 11.5%, compared to their male counterparts (9.6%), suggesting that – in developing countries – early childhood programs may generate disproportionately larger economic gains for women.