Now, increasingly, economists are applying ROI to public investments. Take Henry Levin, a professor of Economics and Education at Columbia University’s Teachers College.
Levin has done a benefit-cost analysis of City Connects, and found strikingly positive results.
Levin’s approach is called “the ingredients method,” and it “calculates how much money any intervention saves society by generating more taxable income, reducing the burden on the health care and public assistance and criminal justice systems, and creating more engaged citizens.”
What’s City Connects’ return on investment?
Research done by Levin and others found the benefits were much greater than the costs.
Accounting for the costs of City Connects alone, Levin found a return on investment of $11 for every $1 invested. Even when including the costs of community-based services like health care, after school programs, food, or clothing, City Connects still produces a positive ROI of $3 for every $1 invested. In short, it would save society a lot of money if City Connects were implemented widely.
“Taken to a larger scale, providing the program to a cohort of 100 students over six years would cost society $457,000 but yield $1,385,000 in social benefits, for a net benefit of $928,000.”
“If City Connects were a company, Warren Buffet would snatch it up,” David Kirp writes in the New York Times.
The bottom line: Investments in City Connects can help students succeed, and it can save the public money. It’s a return on investment that’s good for society — and life-changing for children.