NCJ Number
47948
Date Published
1978
Length
10 pages
Annotation
THE ROLE OF COST-BENEFIT ANALYSIS IN THE EVALUATION OF VOCATIONAL TRAINING PROGRAMS IS EXAMINED, WITH SPECIAL ATTENTION TO THE RESULTS OF THE EVALUATION OF A PROGRAM IN CALIFORNIA.
Abstract
COST-BENEFIT ANALYSIS IS AN EVALUATIVE TECHNIQUE USED TO JUDGE THE EFFICIENCY OF GOVERNMENTAL PROGRAMS. THE TECHNIQUE IS BEST APPLIED TO PROGRAMS THAT HAVE EXPLICITLY STATED ECONOMIC EFFICIENCY GOALS. THE APPLICATION OF SUCH ANALYSIS TO THE EVALUATION OF VOCATIONAL TRAINING PRESUPPOSES THAT RETRAINING CAN BE TREATED AS JUST ANOTHER FORM OF INVESTMENT. THE SOCIAL PRODUCT GAINS (BENEFITS) FROM RETRAINING MAY BE CATEGORIZED AS EITHER PRIMARY OR SECONDARY. PRIMARY GAINS CONSIST OF THE INCREASE IN AGGREGATE OUTPUT (INCOME) ATTRIBUTED TO THE INCREASED PRODUCTIVITY OF THE TRAINEES AND IGNORES THE MULTIPLIER EFFECTS ON THE TOTAL ECONOMY OF GOVERNMENT EXPENDITURES SUPPORTING THE PROGRAM. SECONDARY GAINS WOULD INCLUDE THE REDUCTION OF ASSISTANCE PAYMENTS TO PAROLEES' FAMILIES, REDUCTION IN THE RATE OF RECIDIVISM AND COMMITMENTS OF NEW CRIMES, AND THE INCREASE IN THE GENERAL LIVING STANDARDS OF THE PAROLEE POPULATION. THE COSTS OF RETRAINING MAY BE BROKEN DOWN INTO DISTINCT CATEGORIES. THE FIRST INCLUDES COSTS NOT DIRECTLY RELATED TO THE PROGRAMS SUCH AS SUBSISTENCE COSTS. THE SECOND TYPE OF COSTS RELATE TO THE INVESTMENT PHASE OF THE PROGRAM. THESE INCLUDE THE COST OF INSTRUCTOR'S SALARIES, OVERHEAD COSTS SUCH AS ADMINISTRATIVE OVERHEAD, AND OPPORTUNITY COSTS WHICH ATTEMPT TO MEASURE THE OUTPUT FORGONE DURING THE TRAINING PERIOD. THE RESULTS OF A SURVEY OF INCOME DATA FROM THE CALIFORNIA STATE EMPLOYMENT SERVICE INDICATE THAT THE EXPENDITURES ON THE VOCATIONAL PROGRAM REPRESENT A HIGHLY ATTRACTIVE FORM OF INVESTMENT IN HUMAN CAPITAL. THE SOCIAL PRODUCT GAIN SHOULD MEASURE DIRECTLY THE EFFECT OF VOCATIONAL TRAINING ON THE EARNINGS OF THE PAROLEES. UNFORTUNATELY, INCOME DATA ON THE PRECONFINEMENT EARNINGS OF THE PAROLEES WERE NOT AVAILABLE, SO THE SELECTION OF A COMPARISON GROUP WAS UNDERTAKEN, AND A COST-BENEFIT COMPARISON WAS MADE. TABULAR AND GRAPHIC DATA ARE PRESENTED REGARDING THE RESULTS OF THIS ANALYSIS, INCLUDING DATA ON: THE ESTIMATED HOURLY COSTS OF VOCATIONAL TRAINING FOR SELECTED TRADES, THE AVERAGE ANNUAL INCOME AND HOURS OF TRAINING BY TRADE, AND THE VALUE OF AN HOUR OF TRAINING IN INCOME GAIN. IT IS CONCLUDED THAT IT IS REMARKABLE THAT THE VOCATIONAL TRAINING PROGRAM HAS SUCH HIGH APPARENT BENEFITS IN SPITE OF ALL THE LIMITATIONS IMPOSED ON THE PROGRAM, SUCH AS THE LOW MOBILITY AND ENTRY LEVEL POSITIONS SECURED BY TRAINEES AND THE LACK OF PLACEMENT EFFORT. (KBL)