Henry M. Levin. Columbia University and Center for Benefit-Cost Studies of Education. Emma Garcia. Economic Policy Institute.

Size: px

Start display at page:

Download "Henry M. Levin. Columbia University and Center for Benefit-Cost Studies of Education. Emma Garcia. Economic Policy Institute."

Lesley Crawford
8 years ago
Views:

1 BENEFIT-COST ANALYSIS OF ACCELERATED STUDY IN ASSOCIATE PROGRAMS (ASAP) OF THE CITY UNIVERSITY OF NEW YORK: A STUDY INFORMING THE EXPANSION OF THE PROGRAM Henry M. Levin Columbia University and Center for Benefit-Cost Studies of Education Emma Garcia Economic Policy Institute Donna Linderman City University of New York Society for Benefit Cost Analysis, Washington, DC, March 14, 2014

2 The Problem Urban community colleges 12-15% threeyear completion rate CUNY three-year rate in 2007 (all students): 13% CUNY three-year rate in 2007 (full-time, skills proficient students): 24% Largely enroll minority, poor students who: Have inadequate preparation, poor study skills Need to work and/or have domestic responsibilities Struggle to cover tuition/fees, books, and transportation, etc.

3 What is ASAP? Created in 2007 to increase degree completion at all six CUNY community colleges Minimum 50% within three years Required full-time study in select majors Consolidated course schedules and cohort course taking Mandatory comprehensive advisement, tutoring, and career development Resources to remove barriers to full-time study Tuition waivers for gap not covered by financial aid Free use of textbooks and transportation vouchers

4 ASAP Outcomes: Cohort 1 Constructed comparison group evaluation using Propensity Score Matching by CUNY (2012) Student progress was studied over three years for ASAP (N=1,132) vs. matched comparison group (N=1,791) across six community colleges Three-year Graduation Rates: Comparison Group: 24.1% ASAP: 54.9% [by site]

5 Why A Cost-Benefit Study of ASAP? As ASAP expansion was considered, CUNY wished to know: 1. Is the additional ASAP investment justified? 2. Are there savings due to higher graduation rates? 3. What is the cost-effectiveness of ASAP? 4. Is ASAP a good student and taxpayer investment? 5. What are the specific cost benefits of ASAP to the student and taxpayer?

6 HOW DOES THE INVESTMENT LOOK LIKE FROM A BENEFIT-COST PERSPECTIVE? Are there net benefits to taxpayer? Are there net benefits to student? CBCSE Teachers College, Columbia University

7 ADDITIONAL COSTS OF ASAP The cost analysis-method Costs calculated from allocations to both programs. Budgetary information for ingredients (partially following the Ingredients Method, Levin & McEwan, 2001) Cost per full-time equivalent student (fte, 3 year): Regular program: $29,500 per fte. ASAP adds on $19,800, for a total cost of $49,400 per fte. [by site] Cost per graduate is $63,700 for regular program and $57,300 for ASAP program, (A savings of $6,400 per graduate (approx) or more than $6 million for 1,000 graduates). CBCSE Teachers College, Columbia University

8 IS ASAP A GOOD TAXPAYER INVESTMENT? More education: Additional income. Additional federal, state, and city income taxes. Additional sales and property taxes. Reductions in public health, criminal justice, and public assistance expenditures. Method: Present Value of lifetime benefits (and costs), at age 23 (typical student starts at age 20) Discount rate: 3.5 percent When available, using data representative of New Yorkers CBCSE Teachers College, Columbia University

9 METHOD For example Additional income: American Community Survey ( ) We estimate the income (earnings)-age profile for HS and AA. We calculate the NPV of the income flow, at age 23, for each group (under previous assumptions). We calculate the difference in the NPV. (A visual representation follows) CBCSE Teachers College, Columbia University

10 EXAMPLE OF BE (age 23) Age-Earnings Profiles by Educational Attainment AA HS $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $ Difference NPV (AA-HS) Additional Earnings (*) 324,142 In constant 2010 dollars.

TOTAL FISCAL BENEFITS TO TAXPAYER FOR EACH ADDITIONAL GRADUATE (age 23) Per Additional Associate Degree Total Public (Taxpayer) Benefits $205,514 Tax Revenues From Income (*) $145,567

11 TOTAL FISCAL BENEFITS TO TAXPAYER FOR EACH ADDITIONAL GRADUATE (age 23) Per Additional Associate Degree Total Public (Taxpayer) Benefits $205,514 Tax Revenues From Income (*) $145,567 Property and Sales Taxes $19,833 Savings-Health Expenditures-Public (*) $5,026 Savings-Welfare and Public Assistance (*) $5,956 Savings-Criminal Justice (*) $29,132 In constant 2010 dollars.

BENEFITS AND COSTS TO TAXPAYER PER GRADUATE Comparison Group (regular program) Benefits per additional graduate $205,514 Institutional costs per graduate $65,884 Net benefits per graduate $139,630

12 BENEFITS AND COSTS TO TAXPAYER PER GRADUATE Comparison Group (regular program) Benefits per additional graduate $205,514 Institutional costs per graduate $65,884 Net benefits per graduate $139,630 Benefit-Cost Ratio 3.1 ASAP Cohort Benefits per additional graduate $205,514 Institutional costs per graduate $59,302 Net benefits per graduate $146,212 Benefit-Cost Ratio 3.5 In constant 2010 dollars.

13 TAXPAYER BENEFITS FOR 1,000 ENROLLMENTS Comparison Cohort (regular program) Graduates Net Benefits per Graduate $139,630 Total Benefits to Taxpayer $33,678,756 ASAP Cohort Graduates Net Benefits per Graduate $146,212 Total Benefits $80,211,903 Total Net Benefits per 1,000 Enrollees ~ $ 46,000,000 In constant 2010 dollars.

14 BENEFITS AND COSTS TO STUDENT PER DEGREE Comparison Group (regular program) After-tax Income Benefits $158,742 Direct student costs and foregone income (*) $20,996 Net benefits $137,746 Benefit-Cost Ratio 7.6 ASAP Cohort After-tax Income Benefits $158,742 Direct student costs and foregone income (*) $13,062 Net benefits $145,680 Benefit-Cost Ratio 12.2 In constant 2010 dollars.

15 BENEFIT-COST From a B-C perspective: ASAP is a highly productive investment From a policy perspective: ASAP s effectiveness is highly superior to the conventional program Other considerations: Externalities (general equilibrium effects) Mobility (do graduates stay in area?) Educational success in non-fiscal terms (e.g. transfers). Experimental evaluation (Scrivener, Weiss & Sommo, 2012) and scale up. CBCSE Teachers College, Columbia University

CUNY ASAP TODAY To date, ASAP has served more than 6,400 students across seven cohorts Fall 2013 enrollment (cohort 7): 3,200 students at six community colleges (1,800 new students) Fall 2014

16 CUNY ASAP TODAY To date, ASAP has served more than 6,400 students across seven cohorts Fall 2013 enrollment (cohort 7): 3,200 students at six community colleges (1,800 new students) Fall 2014 projected enrollment: 4,400 students at six CUNY community colleges and one comprehensive college (2,000 new students) Discussion underway to continue expansion through 2018 to even more students and colleges across CUNY Estimated annual cost per student Fall 2014=$3,700

60% 50% Average Graduation Rates of ASAP and Comparison Group Cohorts by Developmental Need at Time of Entry 1 ASAP Comparison Group 50.2% 50.5% 46.7% 56.3% 40% 37.2% 39.7% 34.6% 30% 20% 25.4% 19.

17 60% 50% Average Graduation Rates of ASAP and Comparison Group Cohorts by Developmental Need at Time of Entry 1 ASAP Comparison Group 50.2% 50.5% 46.7% 56.3% 40% 37.2% 39.7% 34.6% 30% 20% 25.4% 19.8% 12.1% 14.5% 11.9% 20.0% 21.7% 18.8% 27.6% 10% 7.9% 5.6% 0% All Dev Need Fully Proficient All Dev Need Fully Proficient All Dev Need Fully Proficient 2-YR Graduates 2.5-YR Graduates 3-YR Graduates 1 ASAP graduates include students who have officially graduated through summer yr and 2.5-yr graduates include fall 2007, fall 2009, spring 2010, fall 2010, and fall 2011 cohorts (N=2,936), and 3-yr graduates include fall 2007, fall 2009, spring 2010, and fall 2010 cohorts (N=2,510). Overall graduation rates are calculated by averaging the individual cohort graduation rates. Source: CUNY Office of Institutitional Research and Assessment and CUNY ASAP participating colleges. October 17, 2013

18 Thank You Donna Linderman u Emma García CBCSE Teachers College, Columbia University

COST-EFFECTIVENESS AND BENEFIT-COST ANALYSES OF ACCELERATED STUDY IN ASSOCIATE PROGRAMS (ASAP) OF THE CITY UNIVERSITY OF NEW YORK

COST-EFFECTIVENESS AND BENEFIT-COST ANALYSES OF ACCELERATED STUDY IN ASSOCIATE PROGRAMS (ASAP) OF THE CITY UNIVERSITY OF NEW YORK Henry M. Levin Teachers College, Columbia University Center for Benefit-Cost