Panel Paper: Benefit-Cost Analysis in Children’s Service Programs: Are We Capturing the Full Picture?

Saturday, November 10, 2018
Wilson C - Mezz Level (Marriott Wardman Park)

*Names in bold indicate Presenter

Connie Park and James Bell, James Bell Associates, Inc.

Calculating the dollar value of the results of a child service program is difficult. In the absence of market data, price information for the social and economic value created by programs in early childhood development and child welfare generally are assumption-driven and inferred indirectly from qualitative and limited quantitative evidence. As a result, valuation of such programs can be underestimated or undervalued. Additionally, lack of consistency in cost methodology across studies can produce cost estimates with a wide range of returns, even among similar service interventions. This paper will examine the feasibility of reporting program costs and monetizing benefits within the context of social service programs, and will highlight key considerations and promising practices to strengthen the accuracy of cost analysis findings to better inform policy and funding decisions.

Based on our work with federal and foundation-funded grantees implementing a wide array of promising and best practices in child welfare and early childhood development (e.g., home visiting, two-generation programs, family-group decision making), we have found that few organizations collect and report program costs in a comprehensive or systematic way. This can lead to a generalizability issue when similar interventions cost out their programs in different ways, as accurate cost estimates are needed for replication and more high-level cost analyses such as benefit-cost analysis and return-on-investment analysis. The paper will highlight a program-level cost toolkit that can be used to support children’s service programs in collecting and reporting the cost of implementing a service intervention.

In terms of assigning a dollar value to, or monetizing, benefits, more comprehensive approaches are needed in the field to fully capture the potential cost savings that programs can provide to states, families, and children. Many cost analyses of children’s service programs have a narrow focus, monetizing only a limited number of outcomes. For programs such as home visiting, with considerable evidence of a broader range of demonstrated outcomes, conservative costing methods can lead to an incomplete picture of potential returns. The paper will provide examples of data sources and methods (e.g., benefit transfer, cost projection) that have been used to monetize observed and expected home visiting outcomes. Some service interventions have also been shown to accrue benefits over time (e.g., long-term benefits such as graduation rates, involvement in the juvenile justice system, youth substance abuse), though oftentimes limited resources are available to conduct long-term follow-up. The paper will describe how administrative data can serve as an efficient approach to tracking long-term child and family outcomes for cost analysis, as well as discuss the challenges and gaps in accessing these data.