The Economics of Scaling Early Childhood Programs: Lessons from The Chicago School

Many ideas show remarkable returns in small-scale trials but often disappoint when scaled to broader populations and contexts. Using early childhood investment as a case study, this study develops a dynamic human capital formation model that integrates complementary skill investment with “Option C thinking” on scaling challenges. The model is stylized in the Chicago tradition: micro-founded with optimizing agents, dynamic skill production, and a policymaker evaluating scaling decisions. It formalizes how naive extrapolation from pilot studies systematically overestimates policy efficacy by ignoring “voltage drops,” declining treatment effects due to unrepresentativeness at scale. The model demonstrates that optimal scaling policy requires mechanism-based design that anticipates these failures through backward induction from implementation realities. The scientific insights from a set of recent studies provide valuable perspectives on the model.