The aim of this study was to assess the economic benefits of improved cognitive development related to being breast-fed. Breast-feeding rates were assessed in the Avon Longitudinal Study of Parents and Children. Educational attainment was assessed at age 16 years with higher attainment defined as gaining five General Certificate of Secondary Education (GCSE) passes at a high grade. The economic benefit of being breast-fed was calculated in a decision model using a child’s educational attainment and the corresponding expected value of average income in later life. There was a positive association between being breast-fed and achieving higher educational attainment, which remained significant, after adjustment for possible confounders: being breast-fed <6 months yielded an OR of 1·30 (95 % CI 1·13, 1·51) and for ≥6 months yielded an OR of 1·72 (95 % CI 1·46, 2·05), compared with never breast-fed children. On the basis of UK income statistics, the present value of lifetime gross income was calculated to be £67 500 higher for children achieving 5 high-grade GCSE passes compared with not achieving this. Therefore, the economic benefit of being breast-fed <6 months would be £4208 and that for ≥6 months would be £8799/child. The model shows that the increased educational attainment associated with being breast-fed has a positive economic benefit for society, even from small improvements in breast-feeding rates. Within a total UK birth cohort of 800 000/year an increase by 1 % in breast-feeding rates would be worth >£33·6 million over the working life of the cohort. Therefore, breast-feeding promotion is likely to be highly cost-effective and policymakers should take this into consideration.