Panel: Measuring Returns On Investments In Human Capital: A Panel Discussion On Recent Research

Thursday, November 8, 2012: 10:15 AM-11:45 AM
McKeldon (Sheraton Baltimore City Center Hotel)

*Names in bold indicate Presenter

Organizers:  Heath Prince, University of Texas at Austin
Moderators:  Burt Barnow, George Washington University
Chairs:  Neha Nanda, IMPAQ International LLC

This panel will present research from four recent studies that examine anticipated returns on investments in postsecondary education and employment and training programs. The first paper, Exploratory Return‐on‐Investment Analysis of Local Workforce Investments, examines exploratory findings from a cost‐benefit analysis of local investment in long‐term workforce development through Capital IDEA. Capital IDEA is a nonprofit workforce intermediary offering sectoral-based occupational skills training and extensive support services to low‐income residents, concentrating on long‐term engagement to improve education and labor‐market outcomes. Benefits were estimated as part of a quasi‐experimental impacts analysis while cost data were obtained directly from Capital IDEA. The second paper, Increasing College Attainment in the United States: The Variation in Returns to States and Their Residents, elaborates on the findings from work led by the National Center for Higher Education Management Systems and the Center for Law and Social Policy to develop online, interactive tools to estimate the returns to the individual, state and nation resulting from increases in the number of students receiving postsecondary certificates and degrees. Included in the estimations are gains in personal incomes, state and federal tax revenues, and reductions in health and corrections expenditures. The third paper, Developing ROI Estimates for the Public-Sector Vocational Rehabilitation Program, examines the impacts of the $3 billion public-sector Vocational Rehabilitation (VR) program, a federal-state partnership designed to provide employment-related assistance to persons with disabilities. This paper utilizes unique and detailed administrative and employment data to examine both short and longer-term employment impacts for separate cohorts of persons with either physical impairments, mental illness, or cognitive impairments who applied for VR services in the state of Virginia in State Fiscal Year 2000. These data provide quarterly information on VR services and employment outcomes from 1995 to 2010. Results from our model of service provision and labor market outcomes provide five and ten-year ROI estimates reveal that VR services generally have positive long-run labor market outcome effects that appear to substantially exceed the cost of providing services. With the fourth paper, ROI Estimation for Workforce Development Programs, the authors discuss how the general clamor to rein in government spending at all levels - federal, state, and local - is causing program administrators to focus on return on investment (ROI). In theory, a prudent investor or a policy maker with fiduciary responsibility for taxpayer funds should use ROI computations to guide their investment and budgetary decisions. Other things being equal, marginal dollars should be invested in programs with the greatest ROI. Calculating ROI for workforce development programs requires considerable data and careful analyses of benefits and costs. This paper describes and discusses the data required to calculate reasonable ROI estimates for workforce programs. It also provides examples of ROI computations based on data from workforce programs evaluated in several states.

ROI Estimation for Workforce Development Programs
Kevin Hollenbeck, W. E. Upjohn Institute for Employment Research

Exploratory Return On Investment Analysis of Local Workforce Investments
Tara Smith and Christopher King, University of Texas, Austin

Increasing College Attainment In the United States: Variation In Returns to States and Their Residents
Patrick Kelly, National Center for Higher Education Management Systems and Matt Crellin, NCHEMS

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