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- Do the benefits resulting from HPOG 2.0 programs as a group exceed the costs of those programs?
The Health Profession Opportunity Grants (HPOG) Program awards grants to organizations that provide education and training to Temporary Assistance for Needy Families (TANF) recipients and other low-income individuals for healthcare occupations that pay well and are expected to either experience labor shortages or be in high demand. ACF’s Office of Planning, Research, and Evaluation (OPRE) is using a multipronged research and evaluation strategy to assess the success of the second round of grants (HPOG 2.0). A Cost-Benefit Analysis (CBA) is one part of the HPOG 2.0 National Evaluation including the 27 nontribal grantees.
This document presents a design plan for the CBA. The design plan will guide the CBA’s estimation of the costs of providing the HPOG 2.0 programs, as well as the comparison of these costs with gains in employment and earnings measured in the impact study. Findings from the CBA—how the social costs (mostly program spending) compare with the social benefits (mostly earnings gains)—will help policymakers assess whether to encourage continuation of the HPOG Program or, potentially, replication of similar programs as part of national policy.
The design plan will serve as a reference and a guide for the CBA of HPOG 2.0 programs. This plan addresses the following questions:
- How will the evaluation determine and monetize the resource costs and benefits of the HPOG 2.0 programs?
- How will the evaluation use the monetized costs and benefits to determine the net present value of the HPOG 2.0 programs—a metric that can inform policymakers’ decisions about program continuation or replication?
Key Findings and Highlights
The overall approach to the CBA is to measure the costs of education and training and associated services and compare these with estimates of the benefits of HPOG 2.0.
The costs measured in the study will include the costs of education and training programs and support services provided to participants. The benefits measured are increases in participants’ earnings and employer-provided health insurance and net changes in taxes and public benefits. Both costs and benefits are measured for treatment group members relative to control group members.
The CBA will examine the costs and benefits of HPOG 2.0 participation from the societal, participant, and government perspectives. The CBA will use a lifetime framework. The study team expects essentially all cost increases associated with HPOG 2.0 to occur within three years of participants enrolling an HPOG 2.0 program. The benefits of increased earnings and other gains will be estimated over a much longer period, the participants’ working lives.
The CBA will be conducted in four steps:
- Measure and monetize HPOG 2.0 program costs.
- Measure and monetize HPOG 2.0 benefits (including projection of lifetime earnings).
- Calculate the net present value of HPOG 2.0 programs.
- Conduct sensitivity analyses to learn whether findings change when alternative assumptions are applied.
Loprest, Pamela, Robert Lerman, and Jacob Klerman (2019). National Evaluation of the Second Generation of Health Profession Opportunity Grants (HPOG 2.0): Design Plan for Cost-Benefit Analysis, OPRE Report # 2019-77. Washington, DC: Office of Planning, Research, and Evaluation, Administration for Children and Families, U.S. Department of Health and Human Services.