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Cost-Benefit Analysis
Cost-benefit analysis may be viewed as a way to calculate society's "return on investment" from an activity or program. These analyses attempt to calculate the actual costs of delivering services and the monetary value of improving particular outcomes for children and families, and to measure whether the benefits exceed the costs. Cost-benefit analysis is often used at a macro level to compare programs that achieve different outcomes (for example, deciding whether to fund a child abuse prevention program or a program to reduce youth violence) or to measure the value of a particular program.
To do a cost-benefit analysis, programs must first accurately calculate their costs. Programs also must establish a causal relationship between the program and particular outcomes (benefits) through an outcome evaluation. Cost-benefit analyses then attach dollar values to those benefits. For example, if a program can demonstrate that it led to a 10 percent reduction in out-of-home care services, it can attach a value to those services to determine the program's monetary benefit.
Child abuse prevention program benefits may include:
- Reduced health and mental health care costs
- Reduced costs of out-of-home care services
- Reduced costs of child welfare services
- Reduced law enforcement and judicial system costs for intervention in cases of child abuse and neglect
- Increased earnings of the child's family members
Although much more difficult to quantify, some cost-benefit analyses also attempt to account for a program's nonmonetary benefits, such as:
- Reduced personal and family stress
- Fewer incidents of child abuse
- Improved social functioning of the children
- Improved physical health
- Improved mental health
- Improved educational achievement
Programs can then compare the program's costs to its benefits. If benefits exceed costs, the program has established an economic justification for continuing these services. If not, programs will have to look for another justification (ethical, political, socially equitable).
The Benefits and Costs of Head Start (PDF - 125 KB)
Ludwig & Phillips
Social Policy Report, 21(3), 2007
Reviews what is known about Head Start's effects on children and proposes that the program is likely to generate benefits to participants and society that are larger than program costs.
Developmental and Economic Effects of Parenting Programs for Expectant Parents and Parents of Preschool-Age Children (PDF - 1060 KB)
McGroder & Hyra (2009)
Examines the individual and social benefits of investing in parenting education based on evaluation results of several effective programs.
Benefits and Cost-Savings Due to Respite (PDF - 55 KB)
ARCH National Respite Coalition Lifespan Respite Task Force (2009)
Summarizes the value of the uncompensated services family caregivers provide, the importance of respite in supporting those caregivers, and the benefits of respite for younger family members with disabilities and for caregivers of the elderly.
Evidence-Based Programs to Prevent Children From Entering and Remaining in the Child Welfare System: Benefits and Costs for Washington
Lee, Aos, & Miller (2008)
Estimates the monetary value of benefits Washington State would accrue if it implemented evidence-based prevention and intervention programs. The study found that 5 years after implementing such programs, the State would net long-term benefits between $317 million and $493 million.
Intensive Family Preservation Programs: Program Fidelity Influences Effectiveness
Washington State Institute for Public Policy (2006)
Reviews Intensive Family Preservation Programs' fidelity and estimates the costs and benefits of adhering closely to the program model.