Assessing the Costs and Benefits of LifeSet, the Youth Villages Program Model for Transition-Age Youth

by Lynn A. Karoly

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Research Questions

  1. What is the value of the resources required to deliver LifeSet, based on the program as implemented and evaluated in Tennessee?
  2. What impacts does the program have on outcomes in the six domains assessed, and what are the best available economic values of the outcomes affected by the program?
  3. What is the estimated net benefit of LifeSet, accounting for uncertainty in the estimates?

LifeSet, operated by Youth Villages in the United States, provides intensive case management and other services for young adults, ages 17 to 22, aging out of the foster care system. LifeSet seeks to ensure a successful transition to adulthood for these vulnerable young adults, with a particular focus on accessing and maintaining stable and suitable housing, remaining free from contact with the criminal justice system, participating in further education and vocational training, obtaining and maintaining employment, and developing other skills required for responsible adulthood.

This report presents a rigorous retrospective analysis of the costs and benefits of LifeSet, based on an experimental evaluation of the program conducted in Tennessee in the early 2010s. The analysis estimates the resources required to implement LifeSet — and therefore program costs. The analysis further places a monetary value on as many of the known causal effects of the program as possible to ensure a complete accounting of the value of the outcomes affected by the program. The resulting analysis of benefits and costs will inform decisionmakers at Youth Villages and elsewhere regarding the potential for a positive return to society from investing in the LifeSet model.

Key Findings

LifeSet cost an estimated $8,400 per participant more than "business as usual," in 2015 dollars

  • The gross cost of LifeSet per participant as implemented in Tennessee was estimated to be about $11,800.
  • Accounting for upper- and lower-bound estimates of the value of services used by young adults in the control group, LifeSet cost an estimated $8,000 to $8,800 per participant more than the control group, with a midpoint base-case estimate of about $8,400 per participant.

LifeSet results in an estimated present-value net benefit per participant ranging from $5,100 to $6,800, with a base-case estimate of about $1,000 per participant

  • LifeSet generated present-value net benefits ranging from about $4,100 to $8,900 per participant, based on observed outcomes.
  • Most of the benefits from the observed outcomes derive from the estimated reduction in victimization cost associated with the statistically significant impact of LifeSet in reducing intimate partner violence.
  • LifeSet produced present-value net benefits ranging from about $4,000 to $5,800 per participant from the more uncertain projected future outcomes.
  • If LifeSet is paid for with tax dollars, the net public dollars required would result in economic costs that partially offset the economic benefits.
  • The benefit-cost ratio exceeds 1.00 for the base case and less conservative assumptions.
  • Accounting for uncertainty in the impacts and economic values of the included outcomes, present-value net benefits are positive 53 percent of the time.

If all outcomes could be valued, the estimated net benefits from LifeSet are likely to be even larger

  • For most of the omitted outcomes, the direction of the estimated impacts of LifeSet would be expected to produce additional net benefits to society. Nevertheless, because the magnitude of the impacts on the outcomes that are not valued was typically small and statistically insignificant, these omitted sources of potential benefits are not likely to generate net benefits that are substantially larger than those already included in the estimate.

Recommendations

To strengthen the evidence regarding the economic benefits of LifeSet, Youth Villages should do the following:

  • Collect comprehensive information about the cost of program implementation for both the services provided to LifeSet participants and the "business as usual" services taken up by the control group.
  • Measure all relevant outcomes that may be affected by the intervention, especially those that can produce public savings and private benefits. Furthermore, go beyond measuring the incidence of any given outcome to also capture the associated magnitude (or quantity) of the impact.
  • Extend the measurement of outcomes beyond the end of the intervention to capture longer-term impacts.

Table of Contents

  • Chapter One

    Introduction

  • Chapter Two

    Evidence of Cost and Outcomes for LifeSet

  • Chapter Three

    Valuing the Outcomes from LifeSet

  • Chapter Four

    Comprehensive Benefit-Cost Analysis for LifeSet

  • Chapter Five

    Conclusions and Implications

  • Appendix A

    Methods and Findings from the WSIPP BCA of LifeSet

  • Appendix B

    Impact Estimates from Evaluation of LifeSet

  • Appendix C

    Adjustment to Program Cost

  • Appendix D

    Monte Carlo Simulation Analysis

Research conducted by

This study was sponsored by Youth Villages and conducted by the Social and Behavioral Policy Program within RAND Social and Economic Well-Being.

This report is part of the RAND Corporation research report series. RAND reports present research findings and objective analysis that address the challenges facing the public and private sectors. All RAND reports undergo rigorous peer review to ensure high standards for research quality and objectivity.

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