Journal of Political Economy Vol. 134 No. 7 2026
The Macroeconomic Consequences of Early Childhood Development Policies
Abstract
To study long-run large-scale early childhood policies, this paper incorporates early childhood investments into a general equilibrium heterogeneous agent overlapping generations model calibrated using US data. A randomized controlled trial evaluation of a short-run small-scale early childhood program in the model predicts effects on children’s education and income that are similar to the empirical evidence. A long-run large-scale program, however, yields over twice as large welfare gains as those of a short-run small-scale program even after considering general equilibrium and taxation effects. Key to this difference is that investing in a child not only improves her skills but also creates better ancestors for future generations.
- DOI
- 10.1086/740224
- Volume
- 134
- Issue
- 7
- Pages
- 2023-2073
- Language
- en
- Sources
- openalex semanticscholar crossref