Costs of Mandatory Education and Training Programs for Teenage Parents on Welfare: Lessons from the Teenage Parent Demonstration. Introduction


To deliver the services described in Chapter II, the three demonstration programs and other agencies that served participants incurred substantial costs.  Our analysis indicates that the value of all resources used by the three programs to serve their participants during fiscal year 1989 ranged from almost one million dollars to just over two million dollars.(1)  On average, the full resource costs of the site programs were between $206 and $344 for each month that a sample member spent on AFDC and was thus eligible for program services, and between $498 and $920 for each month that a sample member spent involved in a major activity -- education, training, or a job.  These figures translate into an annual resource cost per participant, estimated for fiscal year 1989, ranging from $1,730 to $3,130.  The full resource cost of serving participants who took part in education, training, or employment ranged from just over $3,000 to about $5,400 during fiscal year 1989.  Since between 25 percent and 50 percent of these costs were assumed by other organizations (providing in-kind services), direct costs to the programs were significantly less.  Annual per person costs paid by federal and state agencies (program-paid costs) were between $917 and $2,399, and between $1,636 and $4,067 for participants involved in major activities.

The considerable range in costs among the three programs can be attributed to differences in program scale, the variety and intensity of services used, overall program structure, and rates of participation in program activities.  In Section A of this chapter we present data on the cost of the site programs, broken down by components or service categories, and discuss the relationship between cost and program characteristics.  In Section B we present the calculated unit costs of the programs.  In Section C we discuss how the results presented in this report will contribute to a future benefit-cost analysis.