Feb 28, 2012
The National Guard Youth ChalleNGe program is a residential program coupled with post-residential mentoring that seeks to alter the life course of high school dropouts ages 16-18. A cost-benefit analysis employing estimates of the program's effectiveness from a random assignment program evaluation indicates that every dollar invested in the ChalleNGe program yields $2.66 in social benefits, an estimated return on investment of 166 percent.
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Decades of research show that high school dropouts are more likely than graduates to commit crimes, abuse drugs and alcohol, have children out of wedlock, earn low wages, be unemployed, and suffer from poor health. The ChalleNGe program, currently operating in 27 states, is a residential program coupled with post-residential mentoring that seeks to alter the life course of high school dropouts ages 16-18. A rigorous evaluation of the ChalleNGe program employing random assignment has demonstrated that the program has positive effects on educational attainment and employment. The cost-benefit analysis presented in this document estimates that those and other program effects yield $25,549 ($2010) in social benefits per individual admitted to the program, or $2.66 in social benefits for every dollar expended for a return on investment of 166 percent. The program's benefits accrue mostly in the form of higher lifetime earnings attributable to higher levels of educational attainment induced by the program. Under baseline assumptions, this cost-benefit analysis suggests continued operation of existing ChalleNGe sites will yield substantial net benefits to program participants and society at large. This quantitative finding supports public investment in the ChalleNGe program as currently operated and targeted.
Valuing Program Costs
Valuing Program Benefits
Comparison of Costs and Benefits
Alternative Models of Lifetime Earnings Effects