The Monetary Value of Saving a High-Risk Youth

The Monetary Value of Saving a High-Risk Youth

Authors: Mark A. Cohen

Citation: Cohen, Mark A. (1998). The Monetary Value of Saving a High-Risk Youth. Journal of Quantitative Criminology, 14(1), 5--33.

Abstract: Programs targeted at high-risk youth are designed to prevent high-school dropout, crime, drug abuse, and other forms of delinquency. Even if shown to be successful in reducing one or more social ill, a key policy question is whether the cost to society from that intervention program exceeds its benefits. Although the costs of intervention programs are often available, the benefits are more illusive. This paper provides estimates of the potential benefits from “saving” a high-risk youth, by estimating the lifetime costs associated with the typical career criminal, drug abuser, and high-school dropout. In the absence of controlled experimental data on the number of career criminals averted, one can ask the reverse question—How many career criminals must be prevented before the program “pays for itself?” Based on a 2% discount rate, the typical career criminal causes $1.3–$1.5 million in external costs; a heavy drug user, $370,000 to $970,000; and a high-school dropout, $243,000 to $388,000. Eliminating duplication between crimes committed by individuals who are both heavy drug users and career criminals results in an overall estimate of the “monetary value of saving a high-risk youth” of $1.7 to $2.3 million.

Reading Notes

Objective

To estimate the potential benefits from "saving" a high-risk youth using lifetime costs associated with the typical career criminal, drug abuser, and high school dropout

Background

Social/external costs: stolen property, medical costs, lost wages, pain & suffering, labor force productivity of youth

Program assumed to target youth up to age 13. Benefits incurred for age 14 onward

Data & Key Variables

Collected estimands from the literature

Key variables: Wage rate, hours worked, fringe benefits, private benefits to education, public benefits to education

Methodology

Separate estimates of the lifetime cost of a career criminal and lifetime costs of drug abuse

Lifetime cost of a career criminal = total number of offenders*(victim cost+criminal justice cost+cost of incarceration*time served+opportunity cost of offender's time)

Lifetime costs of drug abuse = (1- risk premium for drug dealers)*retail price of drugs+fraction in drug treatment programs*drug treatment cots+wages*hours lost productivity+risk of medical emergency*cost of medical treatment

Results

Estimated monetary value of saving a high risk youth is between $1.7 and $2.3 million

These values should be used to estimate what success rate would be needed to make a cost-benefit analysis of a program hold

Key Table/Figure