PRESENTERS: DR. SONAM GUPTA; DR. MITHUNA SRINIVASAN 2 SOCIETY FOR - - PowerPoint PPT Presentation

IMPAQ INTERNATIONAL LLC.

PRESENTERS: DR. SONAM GUPTA;

• DR. MITHUNA SRINIVASAN

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SOCIETY FOR BENEFIT-COST ANALYSIS

A BENEFIT-COST ANALYSIS OF A WORKFORCE DEVELOPMENT PROGRAM FOR DISCONNECTED YOUTH

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SOCIETY FOR BENEFIT-COST ANALYSIS

PRESENTATION OUTLINE

@LIKE Description Evaluation Components and Main Findings CBA Overall Framework Estimation of Costs Estimation of Benefits Estimation of Net Present Value Sensitivity Analysis Conclusion

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SOCIETY FOR BENEFIT-COST ANALYSIS

WHAT IS @LIKE?

The Linking Innovation, Knowledge, and Employment (@LIKE)

Program is a Workforce Innovation Fund initiative

@LIKE was designed to:

▸ Test strategies to reconnect young adults to educational opportunities,

employment, and community

▸ Focus on socio-psychological elements of resiliency and self efficacy

through life coaching

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WHAT IS @LIKE?

U.S. DOL awarded contract for

$6m;contract began July 2012

Program was in operation across

three unique counties: Imperial, Riverside, and San Bernardino

Served young adults ages 18 to

24 who were disconnected from work and school

SOCIETY FOR BENEFIT-COST ANALYSIS

SOCIETY FOR BENEFIT-COST ANALYSIS

EVALUATION OVERVIEW

Workforce Innovation Fund

(WIF) requirement

IMPAQ International:

Independent evaluator

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IMPACT ANALYSIS

Did the program improve the educational and employment

• utcomes of individuals?

YES!!

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FRAMEWORK: COST-BENEFIT ANALYSIS

Research Questions

• What are the costs associated with the @LIKE program?
• What are the benefits associated with the @LIKE program?
• What is the net benefit or net present value of the program?
• How does the estimate of net present value change if important underlying

assumptions are changed?

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FRAMEWORK: COST-BENEFIT ANALYSIS

• Estimate Incremental or additional per capita cost of the @LIKE

program compared to WIA/WIOA.

• Estimate direct and indirect benefits.
• Consider costs incurred during program implementation.
• Consider a one year horizon and social discount rate of 3 percent.
• Conduct sensitivity analysis.

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SOCIETY FOR BENEFIT-COST ANALYSIS

▸ Program related and non-

program related costs

▸ Cost per participant: $9,036

($5,255 as compared to WIA/WIOA).

▸ Source: @LIKE budget

summary; quarterly performance narrative

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ESTIMATION OF COSTS

Personnel, 8.4% Fringe Benefits, 2.9% Contracts with Service Providers, 80.9% Other, 7.6%

ESTIMATION OF BENEFITS

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Benefit =

• X W X p
• = Impact of the @LIKE program on Outcome

W = Expected dollar benefit from Outcome p = Share of participants who achieved outcome

Outcome Benefit Type Monetization of Benefits Unsubsidized Employment Direct Wages associated with receiving unsubsidized employment Crime Reduction Indirect Savings Associated with Incarceration Costs, Avoided Costs to Crime Victims Reduction in Substance Abuse Indirect Dollar Benefit from not using drugs and/or alcohol

ESTIMATION OF BENEFITS (CONTD..)

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Outcome Estimation Components Estimated Benefit Unsubsidized employment Impact of @LIKE = 26.4% Average annual earnings in CA = $ 50,871 Outcome achievement share = 50.8% $6,822 Crime Reduction Impact of @LIKE = 10% Per Capita Savings from Criminal Justice Costs = $3,016 Per Capita Savings from Tangible Victim Costs = $3,167 TOTAL SAVINGS = $6,183 Outcome achievement share = 6.1% $38 Substance Abuse Reduction Impact of @LIKE = 10% Per Capita Savings from Drug Avoidance = $6,687 Per Capita Savings from Alcohol Avoidance = $2,229 TOTAL SAVINGS = $8,916 Outcome achievement share = 5% $45 $6,905 TOTAL PER CAPITA BENEFIT

SUMMARY OF COSTS AND BENEFITS

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@LIKE results in a $1.30 direct benefit for the average participant, for every $1.00 spent on that participant.

Benefits of the @LIKE Program Direct Benefits Indirect Benefits Society Obtaining Unsubsidized Employment $6,822

• $6,822

Savings associated with Crime Reduction

• $38

$38 Benefit from Reduced Drug & Alcohol Use

• $45

$45 Total Benefit (per participant) Incremental Cost (per participant) $6,905 $5,255

ESTIMATION OF NPV

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=

• +
• −

B = each year’s benefits (direct +indirect) C = average cost T = last year of the analysis t = year from 1 to T r = social discount rate

Item Value Total Benefit $6,905 Cost (Outlay) $5,255 T 1 R 3% Net Present Value $1,449

SENSITIVITY ANALYSES (NPV UNDER DIFFERENT BENEFIT SCENARIOS)

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NPV Scenario Scenario Description r=3% Baseline Direct + All Indirect Benefits $1,449 Scenario 1 Only Direct Benefits $1,368 Scenario 2 Direct + Crime Reduction $1,405 Scenario 3 Direct + Substance Abuse Reduction $1,412

SENSITIVITY ANALYSES (NPV UNDER VARYING r)

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NPV Scenario r=3% r=5% r=6% r=7% Baseline $1,449 $1,321 $1,259 $1,198 Scenario 1 $1,368 $1,242 $1,181 $1,121 Scenario 2 $1,405 $1,278 $1,217 $1,156 Scenario 3 $1,412 $1,285 $1,223 $1,163

CONCLUSION

Program successfully enabled participants to access services

and achieve positive outcomes

Measured benefits of @LIKE exceed its measured costs, one

year following program completion

@LIKE’s net benefits (NPV) are $1,449, under the assumption of

a social discount rate of 3 percent

@LIKE CBA is a useful framework for measuring costs and

benefits associated with young adult training programs

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QUESTIONS??

Sonam Gupta, Ph.D Senior Research Associate IMPAQ International sgupta@impaqint.com (202) 774-1955 www.impaqint.com Mithuna Srinivasan, Ph.D Economist IMPAQ International msrinivasan@impaqint.com (202) 774-1995 www.impaqint.com

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