New research estimates increase of $40 billion annually of lifetime earnings if half of all US infants were better breastfed
In a report from the non-profit organization Resources for the Future, economists Marc Hafstead and Randall Lutter have released a report estimating that if half of all US infants born each year were better breastfed, the total increase in the present value of future earnings to be $40 billion annually. The authors looked at multiple studies which linked breastfeeding to an increase in child’s IQ while controlling for maternal IQ, and went with the most conservative estimate that breastfeeding increases IQ by1.76 points. They found that with this increase in IQ, the expected value of lifetime earnings is increased by about $20,000 per child, for a cumulative figure of $40 billion annually.
The study was based on the National Longitudinal Survey of Youth. They get the earnings data by applying 1.76 IQ points to research showing the overall effect of cognitive performance is a 1.43% gain in lifetime earnings for each additional IQ point. The value of the price of increased earning from IQ comes from the literature on the decreased earnings seen as a result of lead poisoning and its effects on IQ and subsequent earnings. They used current earnings data to apply this to children born in 2014. They then created a computer model in which half of all US children who are not now breastfed are breastfed according to WHO recommendations.
The authors note that their figure of $40 billion (in 2014 dollars) exceeds the combined potential savings of $13 billion (in 2007 dollars) shown by Bartick and Reinhold (2010) for pediatric health costs and costs of premature death, and $17.4 billion for maternal health costs and costs of premature death (2011 dollars) by Bartick et al (2013), a total of $30.4 billion.
[The figure of $20,000 per child is the present value, discounted at a rate of 3%, and has 95% confidence interval of $2,900 to $38,700. For non-economists, the present value means that the lifetime value is not simply the sum of what an individual would earn every year, multiplied by the number of years they work: each year is reduced by the rate of return (the discount rate). For example, $10,000 discounted by 3% over 30 years is only $4,120.]
While the economic benefits of improved IQ are delayed by the time from birth to entering the work force, their magnitude is enormous. The progress choosing breastfeeding since its nadir in the 1970s has likely already made a significant impact on the U.S. economy and we can expect future dividends from the efforts of breastfeeding advocates. The combined potential health and IQ benefits of just over $70 billion per year comes to about $17,500 per live birth, enough to warrant significant investment in helping moms to extend breastfeeding for the recommended duration. Further research on what interventions are most effective in encouraging levels of breastfeeding that maximize IQ gains is also justified by these figures.