How Congress Can Make Smarter Use of Domestic Funds

By Robert Gordon and Robert Shea

Even with the short-term budget deal reached last month, domestic discretionary spending will be billions of dollars below its level of just a year ago. For some of us, that’s a triumph; for others, it’s a tragedy. But we all can agree on the urgent need to spend as wisely as possible.

No field cries out for reinvention more than federal investment in youths who are out of school and out of work. These efforts on behalf of 7 million “disconnected youth” between the ages of 16 and 24 haven’t yet demonstrated great results. While that doesn’t mean we can give up on these young people, it does mean we need to rededicate ourselves to figuring out how better to serve them.

Here there’s an instructive comparison with early childhood programs. President Barack Obama and the U.S. Chamber of Commerce don’t agree on much, but they do agree on the value of preschool. The reason is high-quality research going back decades. Adults who participated in the Perry Preschool and Abecedarian Project initiatives in the 1960s and 1970s finished more school, worked more, earned more and committed fewer crimes than adults who didn’t. Economists such as Nobel Laureate James Heckman cite these studies to find that effective preschool programs can save more than $7 for every $1 spent. Critics point out that Perry and Abecedarian were small in scale, but bigger programs have also shown striking results.

Programs serving disconnected youth, however, have demonstrated less success. As MDRC’s Dan Bloom notes, many initiatives have increased immediate earnings or GED certificate attainment for young people, but these results fade over time. Heckman argues that the return on investment in teens seems lower because it is lower — teenagers have entrenched habits that are difficult and costly to change. This is a plausible theory, but it’s only one take. After all, some programs serving teens still in school do get results. For example, “career academies” — smaller schools inside schools that teach distinct skills and partner with employers — achieve impacts on earnings that are substantial (more than 10 percent) and sustained (persisting after eight years).

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