Cost-Benefit Evaluation for Teen Outreach

Nia Harrison, Nikola Juris, Dori Stern, and Steven Stern

 

 

            Teen Outreach is a program geared at reducing the rates of school failure, teenage pregnancy, and school suspension, primarily in high school students. The program’s primary components are community service and discussing life options in classroom discussions (Allen, et al., 1997). Using an evaluation of the program (Allen et al., 1997), we estimated the costs and benefits of the program in order to measure the net long-term benefit of the program. The calculations for this analysis are presented in Table 1. We performed a number of sensitivity analyses, shown in Table 2, to measure the robustness of our results.[1]

 

            Allen et al. (1997) found that the program reduces the probability of getting suspended by 8.5% and reduces the probability of failing courses by 12.7%, regardless of gender. The researchers also found that Teen Outreach decreases the probability of girls getting pregnant by 1.7%. We assumed that the program increases the probability of graduating high school by 10% for both boys and girls.[2]  We used an average male (female) high school graduate wage of $15.00 ($13.50) per hour. Assuming one works 2000 hours per year, we have base annual earnings of $30,000 ($27,000) for males (females). We assumed the cost of the program to be $300 for each participant. The Task Force on Teen Pregnancy Prevention (1999) found the annual benefit of no pregnancy to be $3,700 in the case of girls. Other potential benefits were calculated by multiplying high school earnings by 46% (Card, 1999) and by the program’s effect on graduating high school. This resulted in $1,380 ($1,242) for boys (girls).

           

Table 1

 

 

 

Boys

Girls

Effect on the probability of getting suspended

0.085

0.085

Effect on the probability of failing courses

0.127

0.127

Effect on the probability of getting pregnant

0

0.017

Effect on the probability of high school

0.1

0.1

Average high school wage per hour

$15.00

$13.50

Annual earnings

$30,000

$27,000

Cost

$300.00

$300.00

Annual benefit of not getting pregnant

0

$3,700

Other potential benefits

$1,380

$1,242

Discount factor

0.9

0.9

Long-term benefit of not getting pregnant

0

$629

Long-term benefit of other potential benefits

$13,800

$12,420

Net benefit

$13,500

$12,749

 

            In order to translate these calculations into long-term benefits, we used annual discount factor of 0.9. We calculated the long-term benefit of not getting pregnant to be the program’s effect on the probability of getting pregnant multiplied by the annual benefit of not getting pregnant and then discounted and added up over the lifetime. This resulted in $629 for girls.[3] Discounting other potential benefits yielded a long-term benefit of $13,800 ($12,420) for boys (girls). Adding up the long-term benefits and subtracting the cost of the program results in a net benefit of $13,500 ($12,749) for boys (girls).

 

Table 2

 

 

 

 

 

Assumption

Net Benefit

Average high school wage per hour

Boys

$15.00

$13,500

 

 

$30.00

$27,300

 

Girls

$13.50

$12,749

 

 

$27.00

$25,169

Discount factor

Boys

0.9

$13,500

 

 

0.8

$6,600

 

Girls

0.9

$12,749

 

 

0.8

$6,225

Cost of the program

Boys

$300

$13,500

 

 

$100

$13,700

 

 

$600

$13,200

 

Girls

$300

$12,749

 

 

$100

$12,949

 

 

$600

$12,449

Effect on the probability of graduating high school

Boys

0.1

$13,500

 

 

0.02

$2,460

 

Girls

0.1

$12,749

 

 

0.02

$2,813

 

            In Table 2, various assumptions that had been made in the base case were changed, one at a time, while holding the others constant in order to measure the sensitivity of the base case analysis. Doubling the average high school wage per hour yields a new net benefit of $27,300 ($25,169) for boys (girls). If we decrease the discount factor from 0.9 to 0.8, the new net benefits become $6,600 ($6,225) for boys (girls). If we decrease the assumed cost of the program from $300 to $100, the new net benefits become $13,200 ($12,449) for boys (girls), while, if we increase the cost to $600, the net benefit declines by a similar amount. Furthermore, reducing the program’s assumed effect on the probability of graduating high school from 10% to 2% results in net benefits of $2,460 ($2,813) for boys (girls).

 

For some of the other programs analyzed, there was significant concern that the benefits of the program would dissipate over time.  Those concerns do not apply here because Allen et al. (1997) is a long-term analysis.

 

It is interesting to compare the analysis in Allen et al. (1997) for Teen Outreach to the analysis in Uggen and Janikula (1999) for Service Learning, especially since the estimates imply that Service Learning is much more effective.  A quick look at Table 3 shows that the difference between the two is that Uggens and Janikula (1999) estimate an effect of the program on being arrested, while Allen et al. (1997) do not.  The cost of criminal activity is quite high,[4] leading to much greater benefits for Service Learning.  Since these two programs are, in fact, very similar, a good guess would be that Teen Outreach has an effect on criminal activity similar to Service Learning.  Note that Allen et al. (1997) find significant effects on activities highly correlated with criminal activities (suspension probability).

 

Table 3

Uggens and Janikula

Allen et al

 

Service Learning

Teen Outreach

 

Boys

Girls

Boys

Girls

Effect on Probability of Pregnancy Before Age 18

0.000

0.056

0.000

0.017

Effect on Probability of Arrest Before Age 18

0.080

0.019

 

 

effect on the probability of getting suspended

 

 

0.085

0.085

Effect on Probability of HS

0.050

0.050

0.100

0.100

Cost

$450

$450

$300

$300

 

Taking into consideration all the sensitivity analyses, the Teen Outreach program has the potential to yield modest to large benefits if it has no effect on criminal activity and large benefits if its effect is similar to Service Learning. 

 

 

References

 

Allen, J., S. Philliber, S. Herrling, and G. Kuperminc (1997). “Preventing Teen Pregnancy and Academic Failure: Experimental Evaluation of a Developmentally Based Approach.” Child Development. 64(4): 729-742.

Card, D. (1999). “The Causal Effect of Education on Earnings.” In O. Ashenfelter & D. Card (Eds.), Handbook of Labor Economcis. 3: 1801-1863. Amsterdam: North-Holland.

Harrison, Nia, Nikola Juris, Dori Stern, and Steven Stern (2008). “Methodology for Youth Development Cost-Benefit Analyses.”  http://www.people.virginia.edu/~sns5r/ccfstf/youthdevmethodology.pdf.

Maynard, R. A. (1996).  “The Costs of Adolescent Childbearing,” In R. A. Maynard (ed.), Kids Having Kids: A Robin Hood Foundation Special Report on the Costs of Adolescent Childbearing.  Urban Institute, Washington, D.C.

Task Force on Teen Pregnancy Prevention (1999). A Community Strategic Plan for Preventing Teen Pregnancies and Sexually Transmitted Diseases. http://people.virginia.edu/~sns5r/teenpregstf/strpln.pdf  

Uggen, C. and J. Janikula (1999). "Volunteerism and Arrest in the Transition to Adulthood." Social Forces. 78(1): 331-362.

 



[1] Details of Methodology are available at Harrison, Juris, Stern, and Stern (2008).

[2] Based on informal email discussion with Joseph Allen.

[3] These estimates relied heavily on estimates in Maynard (1996).  Maynard finds that the effects of pregnancy for boys are statistically insignificant.

[4] See Table 1 in the analysis for Service Learning.