Impact of Early Childhood Developmental Intervention Programs: Cost-Benefit Analysis Using a Proposed Model

Abstract

Objective: Early Childhood Developmental Interventions (ECDIs) were developed with the aim of improving overall functional outcome of children over and above what the home environment provides. Cost-Benefit Analysis (CBA) of ECDIs using a flexible and easy to apply model that can complement the more granular and highly desirable CBA studies that often may be too difficult or too expensive to perform. Methods: Review and analysis of the relevant worldwide literature to determine, on a Percent Per Capita Gross National Product (PCGNP) comparative basis: i) Impact of interventions on cognitive outcomes, ii) Impact of improved cognitive outcome on expected later individualized PCGNP, and iii) Duration of ECDIs and their yearly costs. We subsequently performed a CBA based on an analysis model that uses IQ increases as a proxy for subsequent economic gains resulting from ECDIs. Results: The model used to calculate the impact of ECDIs during the preschool period (two years: ages 3 through 4), is based on the literature that shows the following: Interventions result in a mean increase of intelligence quotient of approximately 8 points, and a higher intelligence quotient is associated with a higher later PCGNP. Projections of revenue resulting from direct benefits of ECDIs versus initial costs revealed a breakeven point for recuperating costs of ECDI at the age of 24 years (range: 22-33 years) with a benefit-cost ratio of 4.19 (2.08-6.24). Conclusion: Our CBA provides a proposed model that can be applied across countries, and that allows for tailored modifications for specific communities (e.g. plugging in different costs for ECDIs). This model could potentially complement the more granular and more desirable cost-benefit studies whenever such studies are not possible to perform but a CBA is nevertheless needed.