The aims of this study were (1) to estimate genetic parameters for some biological and economic measures taken early in life, and subsequent lifetime economic performance traits, and (2) to calculate the expected genetic gain in lifetime performance from selection based on various selection indices. The breeding goal traits were: net income per year of productive life and lifetime income divided by cost. The early economic index traits were: net income per year and income divided by cost, measured during the first lactation or the first 15 months of productive life. Economic traits were calculated on the basis of production, fertility, and disease data on around 10000 cows having an opportunity to produce for at least 5 years. Variance-covariance components were estimated by applying a multiple-trait restricted maximum likelihood procedure to a sire model. The heritability estimates were around 40% for yield in 1st lactation, 20–30% for the early economic measures, and 10–15% for lifetime income/cost. Genetic correlation estimates with lifetime income/cost were 0.75–0.9 for early economic measures, and 0.6–0.7 for 1st and 2nd lactation yields. The annual genetic gain in lifetime economic performance was greater with selection on only 1st lactation yields than when the generation interval was extended to include 120-day yields in 2nd lactation. However, selection on the various early economic measures was up to 12% better than selection on only 1st lactation yields. A potential problem with a positive bias in the estimated correlation between early and lifetime performance exists. This bias is caused by the effect of milk yield on longevity, mediated through the management system.