Breakdown of Benefits and Costs for Estimating Economic Returns of the Chicago Child-Parent Centers (2007 dollars, 3% discount rate)
| Category of Benefits and Costs | Estimate in $2007 |
Average Age of Benefit |
Present Value in $2007 |
Preschool Benefit |
Standard Error Preschool |
School-age Benefit |
Standard Error School-age |
Extended Benefit |
Standard Error Extended |
|---|---|---|---|---|---|---|---|---|---|
| Grade retention (ages 5–14) | 9,173 | 19 | 5,716 | 880 | 226 | 600 | 177 | 594 | 165 |
| Special education (ages 6–18) | 9,910 | 12 | 7,596 | 5,317 | 1,573 | 3,646 | 1,252 | 5,089 | 1,274 |
| Earnings (ages 18–65) | 1,013,865 | - | 277,102 | 22,445 | 7,537 | 6,373 | 7,041 | 10,807 | 7,399 |
| Tax contributions (ages 18–65) | 273,704 | - | 78,996 | 6,399 | 2,149 | 1,817 | 2,007 | 3,081 | 2,109 |
| Juvenile crime (ages 10–18) | |||||||||
| CJS expenditures | 24,105 | 14 | 17,414 | 5,747 | 2,123 | - | - | 2,438 | 1,881 |
| Tangible victim costs | 25,274 | 14 | 18,258 | 4,309 | 1,716 | 347 | 1,153 | 3,013 | 2,561 |
| Intangible victim costs | 83,198 | 14 | 60,104 | 14,185 | 5,648 | 1,142 | 3,795 | 9,917 | 8,431 |
| Adult crime (ages 19–44) | |||||||||
| CJS expenditures | 62,803 | - | 28,077 | 3,313 | 1,674 | - | - | - | - |
| Tangible victim costs | 65,849 | - | 29,439 | 3,474 | 1,755 | - | - | - | - |
| Intangible victim costs | 216,763 | - | 96,909 | 11,435 | 5,777 | - | - | - | - |
| Child abuse and neglect (ages 4–17) | |||||||||
| CWS expenditures | 50,669 | 10 | 41,199 | 3,090 | 1,074 | 536 | 858 | 2,472 | 822 |
| Tangible victim costs | 8,797 | 10 | 7,153 | 536 | 186 | 93 | 149 | 429 | 143 |
| Intangible victim costs (ages 4–44) | 86,482 | - | 49,384 | 3,704 | 1,287 | 642 | 1,029 | 2,963 | 986 |
| Child care (ages 3–4) | 4,472 | 3 to 4 | - | 4,387 | - | - | - | 1,512 | - |
| College expenditures, 2 years | |||||||||
| Public expenditures (2/3) | (8,031) | 18 | (5,155) | (196) | 89 | (88) | 89 | (149) | 100 |
| Private expenditures (1/3) | (4,016) | 18 | (2,578) | (98) | 45 | (44) | 44 | (75) | 50 |
| Adult depression | |||||||||
| Treatment and employment costs | 18,821 | 22 | 10,733 | 494 | 266 | - | - | 429 | 262 |
| Substance misuse (ages 16–44) | |||||||||
| Treatment, medical, productivity and opportunity costs | 134,055 | - | 62,212 | 2,800 | 1,424 | - | - | - | - |
| Total Benefits | - | - | - | 92,220 | 34,549 | 15,064 | 17,594 | 42,520 | 26,182 |
| Public Benefits | - | - | - | 61,246 | 25,493 | 8,000 | 9,331 | 26,884 | 17,605 |
| Program Costs | |||||||||
| Preschool (ages 3–4) | |||||||||
| One year per child | 5,597 | 4 | 5,434 | - | - | - | - | - | - |
| Average per child (1.55 years) | 8,675 | 3 to 4 | 8,512 | - | - | - | - | - | - |
| School-age (ages 6–9) | |||||||||
| One year per child | 2,010 | 6 | 1,839 | - | - | - | - | - | - |
| Average per child (2.14 years) | 4,301 | 6 to 9 | 3,792 | - | - | - | - | - | - |
| Extended intervention (ages 3–9) | |||||||||
| Average per child (3.86 years) | 13,363 | 3 to 9 | 12,719 | - | - | - | - | - | - |
| Less extended program | - | - | 7,556 | - | - | - | - | - | - |
| Marginal cost of the extended | - | - | 5,163 | - | - | - | - | - | - |
| Net Present Value | - | - | - | 83,708 | 26,037 | 11,273 | 13,803 | 37,357 | 21,019 |
| Net Present Value (Public) | - | - | - | 52,734 | 16,981 | 4,208 | 5,540 | 21,721 | 12,442 |
| Benefit-Cost Ratio | - | - | - | 10.83 | 4.06 | 3.97 | 4.64 | 8.24 | 5.07 |
| Benefit-Cost Ratio (Public) | - | - | - | 7.20 | 2.99 | 2.11 | 2.46 | 5.21 | 3.41 |
| Internal Rate of Return, % | 17.8 | - | 9.8 | - | 18.0 | - | |||
| Internal Rate of Return (Females), % | 2.5 | - | 10.2 | - | 25.3 | - | |||
| Internal Rate of Return (Males), % | 21.6 | - | 0.0 | - | 25.3 | - | |||
| Internal Rate of Return (One Year/Shorter Duration), % | 21.1 | - | 10.7 | - | 19.5 | - | |||
| Internal Rate of Return (Two Years/Longer Duration), % | 15.5 | - | 8.6 | - | 20.2 | - | |||
| Internal Rate of Return (Public), % | 17.4 | - | 8.1 | - | 17.7 | - | |||
Note: The benefits of program participation were estimated by multiplying the program coefficient in the explanatory model (see Table 3) by the present value of the outcome in column 4. Grade retention is the average expenditure for one additional year of general education in Chicago reported by Illinois State Board of Education. Special education is the weighted average of four handicapping conditions reported by the Chicago Public Schools: specific learning disability, speech or language impairment, emotional or behavioral disturbance, and mental retardation. Projected lifetime earnings and compensation estimates assume a 3% annual discount rate, 2% real income growth rate, and 43.5% fringe benefit rate. The tax rate is applied to projected lifetime earnings only and is assumed to be 33.3% (15% federal, 3% state, and 15.3 FICA). In estimating the earnings/compensation benefit, the program effect on high school completion by age 24 (8.1 percentage points for the preschool intervention, 2.3 percentage points for school-age intervention, and 3.9 percentage points for the extended intervention) was multiplied by the projected present value life-time earnings benefit from completing high school ($277,102). Crime victim costs are tangible expenditures to victims for adjudicated violent and property offenses (Karoly et al., 1998; Barnett, 1996; Miller et al., 1996). Criminal justice system costs include administrative, treatment, and probation expenditures (Cohen, 1988; Bureau of Justice Statistics, 1997; Illinois Department of Corrections, 1999). The internal rate of return excludes childcare benefits and savings associated with reduced child abuse and neglect. Estimates may not be exact due to rounding. For additional information on program costs and activities, see Reynolds (2000). Contact the authors for additional information on the estimation of benefits and costs.