Problem Set #6: Efficiency and Equity

Problem Set #6: Efficiency and Equity

Foster Care Youth in Transition

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You are evaluating a county program for the transition of foster children out of the foster care system. The county has long drawn criticism for its poor preparation of youth to leave foster care at age 18. An experimental “Youth in Transition” (YIT) program was put in place five years ago, after an audit of court records found that half of foster youth did not have a court-ordered transitional plan.

The Youth in Transition program combines an array of vocational and support services as well as assignment of youth to adult mentors who are themselves former foster youth. A vocational counselor is assigned to work with the foster youth and his/her supervising social worker and foster parents to put in place a transition plan by age 16. The program also places youth in supervised part-time employment; and provides educational supports and career counseling for two years prior to emancipation at age 18. These practices have been shown by previous research to increase the likelihood of graduating from high school and attending college, with positive effects on long-term earning potential. Early employment experience—however limited—substantially reduces the likelihood of adverse life events such as homelessness, or criminal justice involvement.

While the county was unable for political reasons to assign foster youth randomly, the program director argued that the variability in the assignment of foster youth to foster agencies meant that they could base the experimental design on the nonprofit agencies that oversee foster family homes under contract with the county. Hence, half of the county’s foster agencies were assigned randomly into the control group, and continued with traditional approaches to youth transition services, while half participated in the transitional youth program. The traditional program requires the social worker to work with the youth to develop a transitional plan that is approved by the courts. Implementation of the plan is the responsibility of the youth with help from his or her foster parents and supervising social worker.

Collectively the control and experimental agencies served 200 youth (100 per agency). Follow up information was collected for the five-year period following conclusion of the two-year program. Worksheet I in the Excel workbook summarizes the programmatic costs in the traditional and experimental programs, as well as the measured differences between the two groups on various outcome measures. Assume observed differences in the programs are statistically significant.

  • (5 points) What type of evaluation design is the County using to test the effects of the program? What threats to internal validity do you identify in this evaluation design?




  • (5 points) The program sponsor has asked whether the YIT program is more cost-effective than the traditional program. In the context of this evaluation, define cost-effectiveness analysis. Why might one use cost-effectiveness analysis rather than cost-benefit analysis for the assessment of social programs?


  • (20 points). Using the cost and program outcome measures in Workbook I, calculate cost-effectiveness measures for the various outcome measures. Discuss the relative cost-effectiveness of the two programs (traditional v. experimental) with respect to the various measures. Why is the YIT program “less cost-effective” on so many measures?


  • (10 points) What are the problems and/or limitations of using cost-effectiveness to judge whether the YIT program is socially valuable?


  • (10 points) In the context of this program, define cost-benefit analysis (CBA) and describe why it may be more important than the cost-effectiveness analysis. Specifically, explain to the program sponsor why supporting positive outcomes for foster youth has benefits that extend beyond the individual to include social (or communal) benefits. Provide some examples of the social (not individual-level) benefits associated with the more favorable outcomes from the YIT program.


  • (10 points) Consider the effect of the Youth in Transition program in reducing felony convictions. Your colleague has researched criminal justice costs and learned that the average felony conviction is 15 years, at a cost to the state of $42,000 per year. Following the instructions in Worksheet II, calculate the discounted benefits associated with the net decrease in felony convictions (experimental program compared to traditional program), assuming a discount rate of .07.


  • (10 points) Explain to the program sponsor why you cannot simply multiply the savings from avoided imprisonment by 15 to get the value of avoided prison costs. Why in lay terms is it important to discount future savings?


  • (10 points) Considering these findings, do you expect that the YIT program is cost-beneficial considering the range of potential social benefits you have identified? What other information could you gather on social benefits to supplement the analysis of criminal justice savings?


  • (20 points) Explain why it is important from a standpoint of social equity to invest in support services for the transition of foster youth. Understanding that lower-income children of color are significantly more likely to be found in the foster care system, define and incorporate each of the following concepts applies i: (a) merit goods; (b) race neutrality (or lack thereof); (c) vertical equity; and (d) horizontal equity.

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