Upload
trinhkhue
View
215
Download
0
Embed Size (px)
Citation preview
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
TheEconomicBurdenofYouthExperiencingHomelessnessandtheFinancialCaseforInvestinginInterventionstoChangePeoples’Lives:AnEstimateoftheShort-andLong-TermCoststoTaxpayersandSocietyinHennepinCounty,MinnesotaAWhitePaperPreparedforYouthLink
StevenS.Foldes,Ph.D.andAndreaLubov,Ph.D.April6,2015
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
ContentsSummary 2MembersofAdvisoryCommittee 8Acknowledgements 91. Introduction 112. Youthexperiencinghomelessness,disconnectedyouthandemployment 123. Theeconomicburdenofdisconnection 144. Approachofthisreportandlimitations 155. WhoareYouthLinkclients? 20
Age,genderandrace/ethnicityoftheYouthLink2011cohort 20EducationandemploymentoftheYouthLink2011cohort 23
6. Short-termeconomicburden 26Earningsandtaxes 26Crime 28Health 33Welfareandsocialsupports 35Education 39Housing 41Marginalexcesstaxburden 45Theannualeconomicburden 46
7. Immediate,long-termandtotallifetimeeconomicburden 48
8. Break-evenanalysis 519. Conclusionandpolicyimplications 54Abouttheauthors 56
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
2
SummaryDuring2011,1,451non-disabledteenagersandyoungadultsbetweentheagesof16and24visitedYouthLink,abasicneedsdrop-incenterandhomeoftheYouthOpportunityCenterindowntownMinneapolis.Theseyouth,whowereoverwhelminglyyouthofcolor,wereexperiencinghomelessnessorwereat-riskofbecominghomeless,andYouthLinkofferedthemarespitefromstreetcornerlife,ahotmeal,andreadyaccesstocaringstaffandapanoplyofresources.Somewereexperiencinghomelessnessbecauseofmyriadproblemsintheirlives;otherswereexperiencingmultipleproblemsbecausetheylosttheirhousing.Asagroup,theseyoungpeople,andthousandswhocamebeforeandafterthem,werepartofabroadergroupwhoarelargelydisconnectedfromeducationandemployment.Unlikemostoftheirpeers,thesedisconnectedyouthswereneitherinvestinginthefuturethrougheducationalachievementnorgainingworkexperienceandbuildingeconomicindependence.Theyrepresentalargelyhiddengroupatsociety’smargins,andareheadedforalifeofseverelyconstrainedpossibilities.Theeconomicburdenoftheircircumstancesaffectsnotonlythembuttaxpayersandsocietymoregenerally.Inestimatingthesecosts,wetakeacomprehensiveandlong-rangeperspectivethatincorporateslosteconomicopportunitiesandactualexpenses.OurapproachisconsistentwithmethodsusedbyCliveBelfieldandcolleaguesin“TheEconomicValueofOpportunityYouth,”their2012reportcommissionedbytheWhiteHouseCouncilforCommunitySolutionstodeterminethenationaleconomicburdenofdisconnectedyouth,whichtheycalled“opportunityyouth.”1Ourestimatesincludeonlytheeconomicimpactofhomelessnessontheyouthwhoexperienceitorareatriskofbecominghomeless,forthesearetheonlycoststhatcanbemeasureddirectlyindollars.Behindthefinancialcosts,theemotionalcoststotheyouthareobviouslysubstantial.Inevitably,theseyouthfindthemselvesadriftatsociety’sedges,andtheirdailylivesoftenbecomeascrambletoavoidhunger,exploitationbyothers,andanongoingsearchtofindaplacetosleep.Anxietyand1BelfieldCR,LevinHM,RosenR.Theeconomicvalueofopportunityyouth.TheCorporationforNationalandCommunityServiceandtheWhiteHouseCouncilforCommunitySolutions.WashingtonDC:CivicEnterprises.January2012.Availableathttp://www.serve.gov/new_images/council/pdf/econ_value_opportunity_youth.pdfAccessedSeptember12,2015.
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
3
depressionfrequentlyaccompanysuchlives,asthefuturethattheirpeersanticipateincreasinglyseemsunachievableforthem.Infocusingontheeconomicburdentotaxpayersandsocietyofyouthatriskoforexperiencinghomelessness,wedonotdiscountthetollontheyouththemselvesofthelivestheylive.Toestimatetheeconomicburdenofthe1,451youthwhovisitedYouthLinkin2011,weusedatafrommanylocalsources.Weestimateboththeireconomicburdenin2011andtheshort-termcostsofthisagegroup(ages16-24).WerelyonBelfieldandcolleagues’estimateoflong-term(ages25-64)costs.LikeBelfieldandcolleagues,wereportonlythemarginalexpensesofsuchyouthbeyondaveragecostsforyouthinthesameagegroup.Thedatatowhichwehadaccessonthewiderangeofcostsweincludevariedinprecisionandcomprehensiveness,butwemaintainthatthedirectionandmagnitude—ifnotthepreciseamount—ofthecostsdescribedinthisreportareanaccurate,meaningful,andrepresentativeestimateoftheeconomicburdenofyouthexperiencinghomelessnessorat-riskofbecominghomeless.UsinglocaldataallowedustoputalocalperspectiveontheproblemofyouthexperiencinghomelessnessthatwasnotpossibleusingBelfield’snationalstudy.Asthestudyprogressed,itbecamecleartousthateachagencythatprovidesassistancetoyouthexperiencinghomelessnessisawareofthecostsitincurs,butnooneisawareofthe“bigpicture,”thesumofcostsincurredbyallagencies,taxpayers,andsociety,particularlyoverthelifetimesofsuchyouth.WeestimatethatonaverageeachmemberoftheYouthLink2011cohortimposedafiscalandsocialcostin2011of$17,152and$18,638,respectively.Asagroup,in2011the1,451membersofthiscohortcosttaxpayersanestimated$24,894,610,andcostsocietyanestimated$27,049,551.Thelargestcoststotaxpayerswerepublicexpendituresforthecriminaljusticesystemandwelfaretransferpaymentstocohortmembers.Largecoststosocietyincludedthecostsofcrimetovictimsandlostearningsbymembersofthecohort.Theseareaverageannualcoststhatrecureachyearthattheseyouthremaindisconnected,whetherornottheycontinuetobeaffiliatedwithYouthLink.Toestimatetheshort-termeconomicburdenofthiscohortofyouthexperiencinghomelessnessorat-riskofbecominghomeless,wecalculatedthenetpresentvalueofthestreamoffiveyearsofannualcosts,theaverageamountoftimethatanycurrent,specificyouthwillpotentiallybeacohortmember,usingadiscountrateof3.5percent.Theannualburdenwecalculatedisforoneyear,butonlythe24-yearoldsimposeoneyearofburden.Incontrast,16-yearoldhomelessyouthwillimposethisannualburdeneachyearuntiltheyreach24.Therefore,theaverageyouthwillimposetheburdenforfiveyears.(Anapproximateinterpretationisthattheindividualburdensarecalculatedforayouthexperiencinghomelessnesswhois20yearsold,which,coincidentally,wastheaverageageofcohortmembersin2011).
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
4
Theshort-termfiscalandsocial5-yearexcesscostspermemberoftheYouthLink2011cohortare$77,442and$84,152,respectively,andtheexcess5-yearfiscalandsocialcostsfortheentirecohortare$112,400,468and$122,130,139,respectively.TheseamountsrepresenttheaverageeconomicburdenoftheYouthLink2011cohortoverthe16-24agerangeexpressedasalumpsumindiscounted2011dollars.WeuseBelfieldandcolleagues’estimateoftheperpersonlong-term(ages25-64)excesscostsfor“opportunityyouth,”whichare$170,740totaxpayersand$529,030tosociety,estimatedinpresentvalueof2011dollarsusinga3.5percentdiscountrate.Thereportdescribesourrationaleforapplyingtheselong-termcosts,basedonthesimilarityoftheYouthLink2011cohortto“opportunityyouth”intermsoftheirlowerlevelsofeducationalachievementandearnedincome.ApplyingBelfieldandcolleagues’long-termindividualestimatestothe1,451membersoftheYouthLink2011cohortyieldsexcessfiscalandsocialcostsfortheentirecohortof$247,743,740and$767,622,530,respectively,indiscounted2011presentvaluedollars.Addingtheimmediate(5-year)andlong-term(ages25-64)costsprovidesanestimateofthetotallifetimeexcesseconomicburdenofthe2011YouthLinkcohort,expressedaslumpsumamountsin2011presentvaluedollars.Intotal,a20-yearoldYouthLinkcohortmemberwillimposeafulltaxpayerburdenof$248,182andafullsocialburdenof$613,182.Thecohortwillimposeafulltaxpayerburdenof$360,144,208andafullsocialburdenof$889,752,669.Theseamountsaresummarizedinthefollowingtable.Presentvalueoftheestimatedimmediate(5-year),long-termandlifetimefiscalandsocialcostsofthe2011YouthLinkcohort.
Sources:Immediateburdenistheauthors’estimate,ages25-64estimateisbasedonBelfieldtable5,p.22,adjustedforcohortsize.
Percohortmember 2011YouthLinkCohort Fiscalcost Socialcost Fiscalcost Socialcost Immediate(5-year)total $77,442 $84,152 $112,400,468 $122,130,139
Long-term(ages25-64)
$170,740
$529,030
$247,743,740
$767,622,530
Totallifetimecost $248,182 $613,182 $360,144,208 $889,752,669
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
5
Theseexcesscostsrepresentacombinationoflostopportunitiesbytheseyouth,suchasreducedearnedincomeandlowerpaidtaxes,andexcessexpensesincurredontheirbehalf,suchaswelfaretransferpayments,publicexpendituresforhousingandoperationofthecriminaljusticesystem.Thebreak-evenanalysisaddressesthequestionofhowmanyYouthLinkclientswouldneedtochangethetrajectoryoftheirlivesinordertocovertheannualfiscalcostoftheinterventionsdesignedtohelpthembecomeproductiveadults.Weestimatethatthenetpresentvalueofpotentialsavingsoneachyouthbetweenages20and64is$211,059.Weestimateatotalof$18,607,914wasspentin2011tosupporttheYouthLink2011cohort,dividedinthreebroadareas:2
• BasicNeeds:$10,520,994Thesearearangeofexpendituresintendedtomeettheday-to-dayneedsofyouthexperiencingoratriskofhomelessness,suchaswelfaretransferpayments,healthcareservicesotherthanformentalhealthandchemicaldependencytreatment,nightlyshelterandYouthLinkdrop-inservices.
• Housing:$3,613,128Thiscategoryincludescostsincurredtohouseyouthexperiencinghomelessness,withthegoalofestablishinghousingstability.Examplesincludefiscalexpendituresonsupportivehousing,EmergencyAssistance,theYouthMobileTeamandYouthLinkservicesrelatedtohousing.
• TransformativeServices:$4,473,792Theseexpendituresaredesignedtohelpyouthchangetheirlivesthroughmentalhealthandchemicaldependencytreatment,education,welfaresupportprogramssuchasjobskillstraining,andcasemanagementbyYouthLinkandotherstaff.3
Oftheseamounts,$8,086,921,or43.5percent,wasspentonhousingandtransformativeservices,whichhaveagoalofhelpingyouthtochangetheirlives.Basedontheseestimates,thefollowingchartindicatesthenumberofyouthwhoseliveswouldneedtobechangedtobecomeself-sufficient,productiveadultsinordertooffsetthecostoftheinterventions.2Costsincurredbythe2011YouthLinkcohortinthecriminaljusticesystem,whilesubstantial,arenotincludedasaninterventionbecausethecriminaljusticesystemisnotdesignedtosupporthomelessyouththroughmeetingtheirbasicneeds,providinghousing,ortomakethemlessdependentongovernmentsupports.3Weallocatedthecostoffostercareintothesecategoriesbasedonestimatedexpensesforbasicneeds,housingandtransformativeservices.
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
6
PotentiallifetimefiscalsavingsfromdifferentnumberofYouthLink’s2011cohortbecomingself-sufficientatage20.
Source:Authors’calculations.Asshown,allannualinterventionandsupportcostscanbeoffsetif89youth(6.1percentofthecohort)weretoearnenoughsothattheynolongerneedanypublicsupport,beginningatage20.Transformingonly39youth(2.7percentofthecohort)isrequiredtooffsetthecostsofthehousingandtransformativeservices,theexpendituresdesignedtohelpyouthchangetheirlives.Calculatingtheactualnumberofyouthwhohavesuccessfullymadethistransitionisthetopicofasubsequentstudy.Thisestimateofthenumberofself-sufficientyouthneededtooffsetafullyear’scostofinterventionprogramsforallmembersofthecohortrepresentsthenetpresentvalueoftheavoidedcoststhattaxpayersshouldotherwiseanticipatespendingoverthenextfour-and-a-halfdecadesoftheirlives.Ofcourse,peopleseldomchangeasdramaticallyasassumedinthisexercise,butthisanalysissuggeststhepotentialvalueoftransformativeinterventionstotaxpayersiftheinterventionscansuccessfullyalterthelifetrajectoryatthisrelativelyearlypointintheirlivesofonlyasmallnumberofyouthexperiencingoratriskofhomelessness.Shouldtheinterventionssucceedinhelpingmoreyouth,thecostsavoidedbytaxpayerswouldbesubstantial.Forinstance,ifjustoneinfiveclientsofYouthLinkweretobecomeself-sufficient,productiveadults,thenetpresentvalueofavoidedcoststotaxpayersovertheirlifetimeswouldbeworthanestimated$61.2million,exceedingthecostoffundingtotalannualinterventionandsupporteffortsforallby$42million.
$0
$50
$100
$150
$200
$250
$300
$3501 51
101
151
201
251
301
351
401
451
501
551
601
651
701
751
801
851
901
951
1001
1051
1101
1151
1201
1251
1301
1351
1401
1451
PotentialSavings
Millions
NumberofYouthin2011Cohort
BreakevenAnalysis:Proportionof2011CohortthatWouldNeedtoBecomeSelf-SufPicienttoCoverOneYear'sCostofServices
22(1.5%)self-sufkicientyouthcoverannualcostofalltransformativeservices39(2.7%)self-sufkicientyouthcoverannualcostofalltransformativeandhousingservices
89(6.1%)self-sufkicientyouthcoverannualcostofalltransformative,housingandbasicservices 290(20%)self-sufkicient
youthwouldgenerate$42millionsavingstotaxpayers,abovetheannualcostofallservices
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
7
HennepinCountyandothergovernmentalandprivateentitiesexpendsubstantialresourcestoaddresstheproblemsofyouthexperiencinghomelessnessandat-riskofbecominghomeless.Mostoftheseexpendituresareintendedtomeettheday-to-dayneedsoftheseyouth,forneedsrangingfrommealstonightlyshelterandhealthcare.Substantialadditionalexpendituresaremadetohousetheseyouth,withthegoalofhelpingthemachievehousingstability.Otherexpendituresaimtohelpthemtransformthetrajectoryoftheirlives,byaddressingtheirpsychosocialproblems,furtheringtheireducationsandteachingthemjobskills.Therearemanycausesthatleadyouthtoexperiencehomelessness,andmultipleobstaclesthatmustbeaddressedbyprogramswhosegoalistohelpyouthexperiencinghomelessnessaltertheirlives.Successisnotassured,andsomeyouthmaynotbeabletorespondtothebestprograms.Thebreak-evenanalysisdemonstrates,however,thatthelifetimeeconomicburdenofyouthexperiencinghomelessnessorat-riskofbecominghomelessissogreatthatsuccesswithonly39(2.7percent)oftheseyouthisneededinordertopayforallofthehousingandtransformativeprogramsthatwereprovidedin2011.Thebreak-evenanalysisthussuggestsanopportunityfortaxpayersandsociety.Totheextentthatprogramsaimedattheseyouthcanhelpchangethedirectionoftheirlives,thentheseprogramsrepresentaninvestmentintheir—andour—future.Foreachyouthexperiencinghomelessnessorat-riskofbecominghomelesswhobecomesaproductiveandtax-payingcitizenatage20savesanestimated$211,059inlifetimefiscalcosts.However,thisstudyshowsthatalthoughthepayoffforhelpingyouthtransformtheirlivesisenormousintermsofavoidedcoststotaxpayers,theperiodforearningthesavingsislong.Nevertheless,consideringonlytheeconomicimplications,andleavingasidethehumanconsiderations,thisbecomesaninvestmentopportunityweforegoatourownperil.
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
8
MembersofAdvisoryCommitteeMikkelBeckman Director,OfficetoEndHomelessnessSteveCramer PresidentandCEO,MinneapolisDowntownCouncilPhillipeCunningham SeniorPolicyAdvisoronYouthDevelopmentandRacial
Equity,OfficeofMinneapolisMayorStefanieGaley YouthLinkBoardofDirectors;Partner,Faegre,Baker,
DanielsLauraKadwell ExecutiveDirector,HeadingHomeMinnesotaTimMarx PresidentandCEO,CatholicCharitiesBruceNerland YouthLinkBoardofDirectors;SeniorVicePresident,
MorganStanleyLaurieOhmann SeniorVicePresidentofClientServicesandCommunity
Partnerships,CatholicCharitiesBrianPaulson ProgramOfficer,PohladFamilyFoundationWillRoach YouthLinkBoardofDirectors;DirectorofBusiness
Development,BakerTillyVirchowKrauseRandiRoth ExecutiveDirector,InterfaithActionofGreaterSaintPaulSusanSegal MinneapolisCityAttorneyLisaThornquist PlanningAnalysisSupervisor,OfficetoEndHomelessnessAdHoc:Dr.HeatherHuseby ExecutiveDirector,YouthLinkFrancesRoen DirectorofDevelopmentandCommunications,YouthLinkMarneyThomas DirectorofPartnershipsandCommunityEngagement,
YouthLinkKatelynWareburton DataAnalystandSpecialProjectCoordinator,YouthLink
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
9
AcknowledgementsWearegratefultomanyindividualsandorganizationsthatofferedtheirtimeandexpertise,alongwithaccesstodatawithwhichtocompletethisproject.TheprojectAdvisoryCommittee,includingpeoplewithextensiveexperienceandexpertiseinmanyaspectsofyouthhomelessnessandprogramstoaddressit,metseveraltimestoreviewandcommentonourestimatesofcomponentcostsandtoreviewthisreport.Weappreciatetheirtime,interestandexpertguidance.WillRoach,theChairoftheBoardofYouthLink,offeredenthusiasticsupportofthisproject,andtheBoardofDirectorsprovidedaneagerandreceptiveaudiencetopresentationsofinitialstudyestimates.YouthLinkstaffweresimilarlyenthusiasticandsupportiveandofferedessentialguidanceontheirprograms,budgetsandoperations.Inparticular,wearegratefultoDr.HeatherHuseby,KatelynWarburton,MarneyThomas,FrancesRoen,BobNelson,MarcHamannandJarrodFeld.JosephinePufpaff,nowaSeniorProgramManagerattheCorporationforSupportiveHousing,wasanearlychampionofthisstudywhenshewasastaffmemberatYouthLink.JoannaKoenigofCliftonLarsenAllenprovidedexcellentsupportonYouthLinkbudgetquestions.ThisreportcouldnothavebeencompletedwithoutdataandexpertstaffassistancefromHennepinCountystaff.Inparticular,LisaThornquistwasexceptionallyinformative,patientandresponsivetoourmanyrequests.Manyothersrespondedtoourrequestsforspecificinformationonvariousexpenditures.WereceivedassistancewithMnSCUdatafromDr.PhilDavis,BrendaBaileyandCraigSchoenecker.Dr.TimZueloftheHennepinCountyAttorney’sOfficeprovidedinformationonschooldropoutissues.RyanStrackandMargoHurrleassistedwithMinneapolisPublicSchoolstudentdata.LeeBlonsofBeaconInterfaithHousingandChrisNimmerofAeonprovidedinformationonsupportivehousingcosts.SteveHineandMustaphaHammidaoftheMinnesotaDepartmentofEmploymentandEconomicDevelopmentsuppliedearnedincomedata.WeobtainedinformationonhealthcareutilizationandcoststhroughtheMinneapolis/HennepinCountyOfficetoEndHomelessness,withtheassistanceofMarkLeglerandJohannaLewis.CarolAschbackeroftheHennepinCountyHumanServicesandPublicHealthDepartmentprovidedinformationontherateofuncompensatedhealthcarecosts.BaoVangprovidedHennepinCountyadministrativecosts.DebLoonfromAvenuesprovidedhelpfulinformationonyouthsheltercosts.WealsoappreciatetheassistanceofthehelplinepersonnelattheMinnesotaDemographicCenterandtheU.S.CensusofGovernments.WeowespecialthankstoProfessorMariaHanrattyoftheUniversityofMinnesotaHumphreyInstitutewhokindlyre-analyzedrelevantdatafromadifferentprojecttohelpuswithutilizationandcostsofadultandfamilyshelters.
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
10
ProfessorCliveBelfieldofQueensCollege,CUNYconsultedonmethodologicalquestionsandhelpedustoadapthisresearchapproachtoourlocalneeds.JodyRooneyprovidedmethodologicalassistanceearlyinthisproject.WeofferspecialrecognitionandappreciationtotheOttoBremerFoundationfortheinitialsupportneededtostartthisproject.In2010,undertheleadershipofExecutiveDirectorRandiRoth,theOttoBremerFoundationlaunchedintensiveresponsivegrantmakingaroundtheissueofyouthhomelessnessintheTwinCities.OnesignificantresultofthiseffortwastheincreasedcapacityofYouthLinktoserveyouthuptoage24.Additionally,thefoundationprovidedfundingtoinitiatethisbreak-evenanalysis.AdditionalfundingforthisprojectwasprovidedbytheHearstFoundationsandtheBlueCrossandBlueShieldofMinnesotaFoundation.WearegratefulfortheinterestandsupportofBCBSMNFoundationExecutiveDirectorCarolynLinkandProgramOfficerAllisonCorrado.Theauthorsaresolelyresponsibleforanyerrors.
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
11
1.IntroductionA2012studyofthenumberofyouthexperiencinghomelessnessinMinnesotaestimatedthatonanygivennight4,080unaccompaniedyouthexperiencehomelessness,morethanhalfofwhomwerefoundintheTwinCitiesmetropolitanarea.4Thisestimateiswidelyconsideredconservative,sinceyouthexperiencinghomelessnessaredifficulttocountbecausetheyarelesslikelythanadultstostayinsheltersandmorelikelyto“couchhop”orstayinplacesthataredifficulttofind.Indeed,YouthLink,adrop-incenterindowntownMinneapolisthatalsohoststheYouthOpportunityCenter,typicallyservesabout2,000teenagersandyoungadultseachyearwhoareexperiencinghomelessnessorareatriskofbecominghomeless.Thisreportconcernstheeconomicburdenofyouthexperiencinghomelessness,focusingonthecohortof1,451non-disabledyouth,ages16-24,whichYouthLinkservedin2011.Itisessentialtounderstandtheeconomicstakesinvolvedfortaxpayersandsocietyifwefailtointerveneeffectivelytohelpyouthexperiencinghomelessnesschangethetrajectoryoftheirlives.Accordingly,thereportseekstoanswerthequestion:Howmuchdotheseyouthexperiencinghomelessnesscosttaxpayersandsocietyatlarge?Thegoalistoestimatethecomprehensivecostsoftheseyouthfor2011,fortheimmediateperiodwhentheyareages16-24,andforthelongerterm,fromage25through64.Acomprehensiveandlong-termperspectiveonthecostsofyouthexperiencinghomelessnessandonprogramsdesignedtoameliorateitisessentialtomakinginformedpolicydecisionsonallocatingresourcestoaddresstheproblem.Towardthatend,thisreportalsodiscussesresultsofabreak-evenanalysis,intendedtoanswerthequestionofhowmanyyouthexperiencinghomelessnesswouldneedtobecomeproductive,taxpayingadults,avoidingalifetimeofdependency,inordertooffsettheannualcostoftheinterventionsinplacein2011tohelpthemtransformtheirlives.
4LindbergC,PittmanB,GerrardMD.HomelessinMinnesota:youthontheirown;findingsfromthe2012statewidestudyofhomelessness.SaintPaul:WilderFoundation.May2015.
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
12
2.Youthexperiencinghomelessness,disconnectedyouthandemploymentYouthexperiencinghomelessnessarepartofalargergroupofyouthwhoareoftendescribedas“disconnected.”Suchyouthmayhavehomesbutareneitherinschool,increasingtheirskillsandbuildingtheirhumancapital,norengagedinthelabormarketandearningincome.InAmericansociety,youthwhodisengagefromeducationalopportunitiesandthelaborforceatthisage,from16to24,arefailingtoinvestinthehumancapitalneededtobuildaneconomicbaseforanindependentlife,andaremorelikelytorelyonvariousformsofgovernmentsupportfortherestoftheirlives.Theyrepresentalargelyhiddengroupatsociety’smargins,andareheadedforalifeofseverelyconstrainedpossibilities.Theages16-24areacriticaltimebecauseyouthwhodropoutofschoolanddonotgainafootholdinthelabormarketarefarlesslikelytoachieveeconomicindependenceaftertheyreach25yearsofage.Assuch,theages16-24representacriticalwindowoftimeduringwhichinterventionsmustsucceedinordertopreventalifelongpatternofdependence.Thisconclusionisunderscoredbystudiesofyouthwhoageoutoffostercare,manyofwhomaredisconnectedyouth.Suchyouthoftenhaveboutsofexperiencinghomelessness,criminalactivity,andincarceration.5,6TheUrbanInstitute,undercontractfortheU.S.DepartmentofHealthandHumanServices,studiedthelong-termemploymentoutcomesforyouthwhoageoutoffostercare,usingdatafromthreestates,includingMinnesota.7Thestudyreliesondatathatbecameavailableonlyrecentlytoexaminepatternsofemploymentandearningsthroughage24forformerfosteryouth,todocumentthattheseyouthdonotfarewellonavarietyofemploymentoutcomes.Comparedtoyouthnationallyandevenyouthfromlow-incomefamilies,youthwhoageoutoffostercarearelesslikelytobeemployedoremployedregularlyandtheyearnverylittle.Astheyagefrom18to24,morethanhalfoftheseyouthexhibita5CourtneyM,PiliavinI,Grogan-KaylorA.TheWisconsinstudyofyouthagingoutofout-of-homecare:aportraitofchildrenabouttoleavecare.1998.6CourtneyM,PiliavinI,Grogan–KaylorA,NesmithA.Fosteryouthtransitionstoadulthood:alongitudinalviewofyouthleavingcare.ChildWelfare,2001:80(6),685-715.7UrbanInstitute.Comingofage:employmentoutcomesforyouthwhoageoutoffostercarethroughtheirmiddletwenties.PreparedundercontractHHSP233000010T.U.S.DepartmentofHealthandHumanServices,OfficeoftheAssistantSecretaryforPlanningandEvaluation.2008.
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
13
patternofcompletedisconnectionoronlylimitedconnectiontotheworkforce.Atage24,averagemonthlyearningsforformerfosteryouthwhoworkedwere$690inCalifornia,$575inMinnesota,and$450inNorthCarolina,comparedto$1,535forallyouthnationally.Fewerthanoneinfiveearnedalivablewage.Thestudyfoundthatcasehistoryfactorsdonotappeartoplayanimportantroleininfluencingemploymentoutcomes.Employmentandearningsdifferencesbetweenyouthwhoageoutoffostercareandyouthfromlow-incomefamiliespersistinCaliforniaandMinnesotaevenwhencontrollingfordemographicfactors.Ifunchangedbyage25,thistrajectoryclearlyhaslifelongeconomicconsequencesfordisconnectedyouth,affectingeverythingfromearningsandself-sufficiencytophysicalandmentalhealthandmaritalprospects.Inaddition,taxpayersandsocietyatlargebearaneconomicburdenfromtheunrealizedpotentialoftheseyouth.Thiseconomicburdenappearsinmultipleforms:lowerproductivity,reducedtaxespaid,higherratesofcriminalactivity,andgreaterrelianceongovernmentsupport.Inaddition,suchdisconnectionisaleadingsocialdeterminantofpoorhealth,raisinghealthcarecostsforthenation.
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
14
3.TheeconomicburdenofdisconnectionTheenormouseconomicburdenassociatedwithdisconnectedyouthcameintofocusonlyrecently.Infall,2010,PresidentBarackObamaappointedtheWhiteHouseCouncilforCommunitySolutions(WHCCS),andchargeditwithfindingwaystosolvenationalproblemsatthelocalcommunitylevel.TheCouncil’skeyinterestbecameyouthunemployment,particularlyamongdisconnectedyouthwhoareneitherlookingforajobnorengagedineducationortraining.TheWHCCScommissionedastudytoestimatethesizeofthisgroupnationally,theirdemographiccharacteristicsandtheirsocialandfiscalcosts.TheresultingreportbyCliveBelfieldandcolleagues,“TheEconomicValueofOpportunityYouth,”releasedinJanuary,2012,estimatedthat6.74millionAmericanyouth,ages16-24—fully17percentoftheagegroup—arewhattheauthorscalled“opportunityyouth,”whoareneitherinschoolnorparticipatinginthelabormarket.8Abouthalfoftheseyouthare“chronicopportunityyouth,”andhaveneverbeeninschoolorworkaftertheageof16.Theotherhalfare“under-attached,”andhavenotprogressedthroughpost-secondaryeducationorsecuredastableattachmenttoemploymentdespitesomeschoolandworkexperience.Theauthorsusedawidevarietyofdatasourcestoestimatethecostsoftheseyouth.Conservatively,theyestimatedthateach“opportunityyouth”imposes—onaverageandcomparedtootheryouth—animmediatetaxpayerburdenof$13,900peryearandanimmediatesocialburdenof$37,450peryear(2011dollars).Theseamountsareinadditiontothecostsnon-“opportunityyouth”imposeonsociety.Theseareannualamountsforeachyearthatayouthisidentifiedashaving“opportunityyouth”status.Aftereach“opportunityyouth”reaches25,heorshewillsubsequentlyimposeafuturelifetimetaxpayerburdenof$170,704andasocialburdenof$529,030,innetpresentvaluedollars(discounted3.5percent).AccordingtoBelfieldandcolleagues,thenetpresentvalueofthefulleconomicburdenofeach20yearold“opportunityyouth”is$235,680totaxpayersand$704,020tosocietyatlarge.8BelfieldCR,LevinHM,RosenR.Theeconomicvalueofopportunityyouth.TheCorporationforNationalandCommunityServiceandtheWhiteHouseCouncilforCommunitySolutions.WashingtonDC:CivicEnterprises.January2012.Availableathttp://www.serve.gov/new_images/council/pdf/econ_value_opportunity_youth.pdfAccessedSeptember12,2015.
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
15
4.ApproachofthisreportandlimitationsThereportbyCliveBelfieldandcolleaguesfortheWhiteHouseCouncilforCommunitySolutions,withitscomprehensiveandlongitudinalestimateoftheeconomicburdenofdisconnected,or“opportunityyouth,”receivedwidedistributionandconsiderableattentioninpolicycirclesandamongsocialserviceagenciesworkingwiththeseyouth.Recognizingitsvaluetoframepolicydiscussionsonyouthexperiencinghomelessnessaswellasthebroadercategoryofdisconnectedyouth,thisreportbuildsontheapproachandmethodsemployedintheWHCCSreport.Accordingly,thisreportseekstoestimatethecomprehensiveimmediateandlongitudinaleconomicburdenofyouthexperiencinghomelessnesstotaxpayersandsocietyusingthesameapproach.TheBelfieldreportcalculatesthelostearnings,lowereconomicgrowth,lowertaxrevenuesandhighergovernmentspendingassociatedwith“opportunityyouth,”andreportsonlythemarginalexpensesofsuchyouthbeyondaveragecostsforyouthinthesameagegroup.InthisreportweusethesamecategoriesofcostreportedbyBelfieldandcolleaguesandsimilarlyreportthemarginalcostsofyouthexperiencinghomelessnesscomparedtoaverageyouthofthesameagegroup,butwhereverpossiblewereplacenationalwithlocalcostestimates.Becausetheseyouthwereexperiencinghomelessness,oratriskofbecominghomeless,however,weincludeanadditionalcategoryofexpenseforhousing,whichwasnotacentralconcernforBelfieldandcolleagues’studyofthebroadergroupof“opportunityyouth.”Thecategoriesofexpensesexaminedinthisreport,andtheirdefinitions,areinTable1.
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
16
Table1:Categoriesofexpensesandtheirdefinitionexaminedinthisreport.Category Definition
Lostearnings Grosswageearningsexcludingfringebenefits
Losttaxpayments Includesfederal,stateandlocalincome/consumptiontaxes
Crime:publicexpenditures Criminaljusticesystem,policingandcorrections,judicialandlegalexpenditures(federal,stateandlocal)
Crime:victimcosts Reducedqualityoflife,monetarydamages,lostearningsHealth:publicexpenditures HealthservicespaidbyDHS,estimateduncompensatedcare
Welfare:supportprogramsExpendituresonsocialsupports(e.g.GEDtraining,workforceretraining,fostercare)Welfare:transferpayments
Amountspaidtoindividualswhoreceivegovernmentsupports(MPIF,GA,SNAP)
Housingsupport: EmergencyAssistanceProgram
Countysupportforapartmentdeposits,backrentandutilities,essentialrepairs
Temporaryshelterstays Governmentorcharitysponsoredshort-termshelterprogram
Supportivehousing Longer-termtransitionalhousingwithsocialsupportsEducation: Highschool“savings”ondropouts Netsavingsonper-studentallocation
College“savings”fromlowerattendance
Netsavingsinpublicexpendituresforcollegetuitionandsupportcosts
MarginalexcesstaxburdenCostofraisingtaxestopayforpublicservicesLikeBelfieldandcolleagues,weestimatetheimmediateburden—thatincurredwhenapersonisaged16-24—andthefutureburden—thatincurredfromages25to64.Wealsoestimatetheeconomicburdenofyouthexperiencinghomelessnessfromtheperspectiveofboththetaxpayerandsociety.Thisreport’sfocus,however,ismuchmorespecific,examiningtheexpensesassociatedwith1,451non-disabledyouthwhowereclientsatYouthLinkduring2011.9Theclientsfrom2011wereselectedfortworeasons.First,thiswastheyearwhenYouthLinkimplementedtheYouthOpportunityCenter(YOC),whichisYouthLink’scurrentconfiguration.TheYOCisacollaborationofagenciesproviding9Thisreportexcludes348YouthLinkclientsduring2011whoweredisabledoraboutwhomnodatawereavailablefromHennepinCounty.Thedisabledyouth,whoreceivedSupplementalSecurityIncomepayments,wereexcludedbecausetheyrepresentauniquesubgroupwhoselifeopportunitiestendtodifferfromthosewhoarenotsimilarlydisabled.
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
17
servicestoyoungpeopleinonelocation.Havingawidevarietyofserviceprovidersinonelocationhelpsbreakdownthebarriersyoungpeoplemayfaceinaccessingtheseservicesandprovidesthemwithawiderrangeofopportunitiesandresources.Second,theopportunityexiststofollowthe2011cohortovertimeinordertodetermineiftheservicestheseyoungpeoplereceivedhelpedthemtotransformtheirlivesby2016,astheyapproached—onaverage—age25.Thislineofinquiryisbeyondthescopeofthisreport,butwillbepursuedinasubsequentstudy.Belfieldandcolleaguesusedawiderangeofnationaldatatoestimatethenumberof“opportunity”youthintheU.S.andtheeconomicburdentheyimpose.Theapproachusedinthisreportsimilarlydrawsonawiderangeoflocaldatasources,whichwillbedescribedaseachcomponentcoststudyisdiscussedbelow.Wewereabletoobtainde-identifiedinformationdetailingthe2011expensesincurredbythe1,451youthfromYouthLink,multiplegovernmentagenciesandeducationalinstitutions,allowingustoreportactualshort-termcostsforthiscohortinallbutoneofthecomponentcostareas.However,dataandtimelimitationsmadeitimpossibletodirectlyestimatethelong-termcosts,fromages25-64,ofthe2011cohort.Instead,weapplythelong-termcostestimatefor“opportunityyouth”calculatedbyBelfieldandcolleagues.Therationaleforthisdecisionisdiscussedinthesectiononlong-termeconomicburden.Theintentofthisanalysisistoprovideameaningfulestimateoftheeconomicburdenofacohortofyouthexperiencinghomelessness.Theprecisionoftheestimateinthisreportrequirescomment.Severalgeneralandsomespecificlimitationsqualifytheprecisionoftheestimate.OnegeneralfactoristhatwehaveusedonlyasingleyearofdataontheYouthLink2011cohorttoestimatecostsovernineyearsfortheagegroupfrom16-24.FollowingBelfieldandcolleagues,weestimatethefiscalandsocialcostofcohortmembersin2011andimplicitlyassumethatthecostsweidentifiedarerepresentativeoftheannualcostsovertheperiod.Theshort-termestimateofcohortcostsforages16-24reliesonthefactthattheYouthLink2011cohortincludesyouthfromeachage,andontheassumptionthateachcohortmemberremainsinthisgroupandaccumulatescostsforuptonineyears,dependingonage,whetherornottheyareYouthLinkclientsduringthattime.WeknowofnoreasontobelievethatthiscohortdiffersmateriallyfromYouthLink’sclienteleinotheryears,butusingcross-sectionaldatatoestimatelongitudinalcostsrequirestheassumptionthatthiscohortisrepresentative.Inanyeconomicanalysisthatgathersdatafromawiderangeofsources,theprecisionandcomprehensivenessoftheinformationvaries.Astrengthofthisstudyisthattocalculatetheshort-termcostsitreliesonactualbehavioralandeconomicdata,mostlyfromlocalsources,onspecificpeople.Someinformationsources,
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
18
however,couldsupplyonlylesspreciseorcompleteinformation,orlessthanidealinformation.Specificdatalimitationsinclude:
• Intheareaofcriminalactivitywehadtorelyonarrestratherthandispositioninformation,andwehadtoimputecriminalactivitiesforjuvenilesaged16-18.WewereunabletodisaggregatethecostsofthecriminaljusticesystemandreliedonCensusofGovernmentdataforexpenditureestimates,localizedtoMinnesota,HennepinCounty,andMinneapolis.BelfieldandcolleaguesalsoreliedonCensusofGovernmentdatatoestimatecriminaljusticesystemcosts.
• Regardingeducation,MinneapolisPublicSchoolinformationdidnotinclude
dataoncharterschools,wheresomeYouthLinkclientsmaybeenrolled.Wedidnotobtainenrollmentinformationfromotherschooldistricts,suchasSt.PaulorsuburbandistrictsnearMinneapolis.Weexcludedtherelativelyminorcostsofschoolretentioninitiativessuchasthebe@schoolprogram.
• Wederivedestimatesofwelfaretransferpaymentsfromindividual-level
data,renderingtheseestimateshighlyaccurate,butwelackedinformationonhowmanycohortrecipientswerepregnantoralreadyhadchildren,makingitnecessarytoestimatefamilysupport,foodsupport,andgovernmentsupportedchildcareexpensesbasedonadvicefromHennepinCountystaff.
• Wewereunabletofindcomprehensivelocaldatasourcesonwelfaresupport
programs,suchastheJobCorps,andinthisonecategoryofshort-termexpensesweusedBelfieldandcolleagues’nationalestimateofcosts.
• YouthLinkrecordsdidnotindicatehowmanycohortmemberslivein
supportivehousing,andforhowlong,requiringthatweestimatecohortcostsbasedonasinglepoint-in-timecountofYouthLinkoccupants.
• Similarly,directlycomparableinformationongeneralpopulationyouthwas
difficulttofindinsomecases,andoftenthesedataarenationalandnotspecifictoMinnesota.
• Inestimatinglong-termcosts,weassumednoinflationorchangesincosts,
andappliedadiscountrateof3.5percent.Inaddition,welackedinformationonthedistributionofcostsandhadnomeaningfulassumptionsonwhichtovarycomponentcosts,precludinganysensitivityanalyses.
Becausetheprecisionandcompletenessofthedatatowhichwehadaccessvariesacrossthecomponentstudies,asindicatedabove,thepointestimateswereportshouldbeinterpretedcautiously.
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
19
Ideally,dataanalysisreliesonindividual-leveldatathatcanbeinvestigatedusingstate-of-the-artstatisticaltechniques.Forthisstudy,however,individual-leveldatawerenotavailablefromallsources,andtheindividual-leveldatawereinallinstancesde-identified,makingitimpossible,forexample,toanalyzetheearningsofindividualstogetherwiththeirdemographiccharacteristics,educationalattainment,criminalactivityandreceiptofwelfareassistance.Thislimitedtheabilitytoinvestigateassociationsandcausalrelationshipsamongthesevariables.Forallthesereasonstheprecisionofthecomponentstudyestimatesvariesandassociationsandcausalrelationshipsarenotdiscussedandshouldnotbeinferred.Accordingly,itisbesttoviewtheoverallcostestimateoftheYouthLinkcohortasarobustbutnotpreciseindicationofcosts.10WebelievethatwehavecapturedthecoststhatarethemajordriversoftheeconomicburdenofyouthexperiencinghomelessnessinHennepinCounty.Wemaintainthatthedirectionandmagnitude—ifnotthepreciseamount—ofthecostsdescribedinthisreportareanaccurate,meaningful,andrepresentativeestimateoftheeconomicburdenofyouthexperiencinghomelessnessorat-riskofbecominghomeless.10Costswerecalculatedtothedollarbutthissuggestsahigherlevelofprecisionthanisappropriate.Alldollarvaluesareestimates,asdiscussedinthelimitations.
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
20
5.WhoareYouthLinkclients?TheyouthwhobecomeclientsofYouthLinkaretypicallyexperiencinghomelessnessandareunaccompaniedbyanadult.Somemayhavebeenturnedoutfrom,orrunawayfromdysfunctionalfamilies,orareatriskofbecominghomeless.Somehaveagedoutorrunawayfromfostercare.Manysufferfromemotionaldistressanddepression,substanceabuseandphysicalhealthproblems.Often,theseyouthhaveahistoryofpoorperformanceinschool,difficultywithemploymentandbrusheswithdelinquency.Some,particularlytheyoungwomen,ofwhomsomearesinglemothers,areespeciallyvulnerabletoexploitation.ManysuchyouthfindtheirwaytoYouthLink,indowntownMinneapolis,adrop-incenterandhomeoftheYouthOpportunityCenter,wheretheycangetoutofthecold,takeashower,eatahotmeal,orreceivemultipleservicesfromacaringstaff.Eachyear,YouthLinkservesapproximatelytwothousandteenagersandyoungadults,mostofwhomarebetweentheagesof16and24.Age,genderandrace/ethnicityoftheYouthLink2011cohortCharts1and2describetheageandgenderoftheYouthLink2011cohort.Asshown,themedianageis20and58percentisfemale.Thelargerproportionoffemalesisconsistentwiththe2012Wilderstudyofyouthexperiencinghomelessness,55percentofwhomwerefemale.
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
21
Chart1:AgedistributionofYouthLink2011cohort.
Source:YouthLinkdataanalyzedbyauthors.Chart2:GenderdistributionofYouthLink2011cohort.
Source:YouthLinkdataanalyzedbyauthors.TheracialandethniccharacteristicsofYouthLinkclientsindicateadefiningaspectofyouthhomelessnessinHennepinCounty.Chart3presentsapercentagedistributionofyouthages16-24inHennepinCounty,basedonthe2010U.S.DecennialCensus,andyouthofthesameagerangeexperiencinghomelessnessintheTwinCitiesmetropolitanarea,basedon2012WilderFoundationdata,andYouthLinkclientsin2011.Thecategorieshavebeensimplifiedtocomparewhiteyouthandyouthofcolor,becausethesesourcesusesomewhatdifferentracialand
2.8%
10.4%
15.7%
20.7%22.9%
16.2%
7.0%3.7%
0.5%0%
5%
10%
15%
20%
25%
16 17 18 19 20 21 22 23 24Age
AgeDistributionof2011YouthLinkCohort
58.4%
39.3%
0.6% 0.1% 1.5%0%
10%
20%
30%
40%
50%
60%
70%
Female Male TransgenderQuestioningNotreported
GenderDistributionof2011YouthLinkCohort
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
22
ethnicgroupingsofpersonsofcolor.ThespecificbreakoutintheYouthLinkcohortis9.4percentwhiteor“EuropeanAmerican,”66percentisAfricanorAfricanAmerican,4percentisNativeAmerican,and2percentisChicanoorLatino.Theremainderisotherracesorethnicities,ormultipleraces/ethnicities.AsChart3shows,morethan90percentoftheYouthLink2011cohortand82percentofyouthexperiencinghomelessnessintheTwinCitiesmetropolitanareaisyouthofcolor.Bycomparison,only36percentofyouthinHennepinCountyisyouthofcolor.11Basedonthesedata,itisclearthattheexperienceofhomelessnessamongyouthisdisproportionatelyaproblemofyouthofcolor,andparticularlyofAfricanAmericanyouth.Chart3:Race/ethnicitydistributionofYouthLink2011cohort,comparedtohomelessyouthintheTwinCitiesmetropolitanareaandyouthinHennepinCounty.
Sources:U.S.CensusBureau;WilderFoundation;YouthLinkdataanalyzedbyauthors.Thehighlydisproportionaterepresentationofyouthofcolor,andparticularlyAfricanAmericanyouth,amongYouthLink’sclientsin2011isconsistentwithnationaltrendsamongdisconnectedyouth.ArecentstudyofdisconnectedyouthconductedbytheSocialScienceResearchCouncil(SSRC)emphasizedtheracial/ethnicdisparityamongsuchyouth,whichitdefinedmorerestrictivelyas
11U.S.CensusBureau,2010.Availableathttp://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=DEC_10_SF1_SF1DP1&prodType=table.AccessedFebruary10,2016;LindbergC,PittmanB,GerrardMD.HomelessinMinnesota:youthontheirown;findingsfromthe2012statewidestudyofhomelessness.SaintPaul:WilderFoundation.May2015.
64.0%
18.0%9.4%
36.0% 82.0% 90.6%
0%
20%
40%
60%
80%
100%
YouthinHennepinCounty
TwinCitiesMetroHomelessYouth
YouthLinkClients
PercentageDistributionofRace/Ethnicity:YouthinHennepinCountyandHomelessYouthinTwinCitiesMetroandYouthLinkClients
WhiteYouth YouthofColor
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
23
youthages16-24whoareneitherinschoolnoremployed,sosimilartoBelfieldandcolleagues’definitionof“chronicopportunityyouth.”12Investigatingyouthdisconnectioninthe25largestmetropolitanareas,theSSRCstudynotedthattherateintheMinneapolis-St.Paulareawas9.3percentin2010,secondlowestinthecountryafterBoston.TherelativelylowrateofdisconnectionintheTwinCitiescorrelateswithrelativelyhighratesofadulteducationalattainmentandlaborforceparticipation,andwithrelativelylowratesofpovertyandunemployment.However,theSSRCstudypointedtothelargeracial/ethnicgapinyouthdisconnectionintheTwinCities,wheretherateamongAfricanAmericanswas22.5percent,comparedto7.2percentamongwhites.AfricanAmericanyoutharemorethanthreetimesaslikelytobedisconnectedaswhitesare—thesecond-largestdisparityofthemetroareasinthisstudyafterPittsburgh.EducationandemploymentoftheYouthLink2011cohortLimitededucationalattainmentisadefiningcharacteristicofdisconnectedyouth.InHennepinCounty,92percentofalladultsoverage24graduatedfromhighschool.13Belfieldandcolleaguesestimatethatthehighschoolgraduationrateof“opportunityyouth”is18percentagepointslowerthanthegeneralpopulation,suggestingthatonly74percentof“opportunityyouth”inHennepinCountywouldbehighschoolgraduates.Infact,asshowninChart4,amongYouthLinkclientsin2011whowereage18orolder,only40percenthadreachedthislevelorhigherofeducationalattainment,andanadditional7percenthadcompletedaGED.Althoughsomeoftheseyouthmaycontinuetheireducationsandgraduatefromhighschoolbyage25,thissuggeststhateducationalattainmentamongtheYouthLink2011cohortisconsiderablylowerthaninthegeneralpopulationofHennepinCounty.
12Burd-SharpsS,LewisK.Oneinseven:rankingyouthdisconnectioninthe25largestmetroareas.Brooklyn,NewYork:SocialScienceResearchCouncil.September2012.Availableathttp://www.measureofamerica.org/one-in-seven/.AccessedOctober21,2015.13U.S.CensusBureau,2009-2013.Availableathttp://quickfacts.census.gov/qfd/states/27/27053.html.AccessedOctober21,2015.
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
24
Chart4:EducationachievementofYouthLink2011cohort,age18andgreater.
Source:YouthLinkdataanalyzedbyauthors.Limitedornoemploymentistheseconddefiningcharacteristicofdisconnectedyouth.DatafromtheMinnesotaDepartmentofEmploymentandEconomicDevelopment(DEED)onearnedincomeduring2011revealthat,althoughasmanymembersoftheYouthLink2011cohortwereemployedasyouthinthegeneralpopulation,theyworkedfarfewerhoursandwerepaidlowerwages.In2011,856(59percent)membersoftheYouthLinkcohorthadreportedearnings.Incontrast,60percentofallyouthreportedsomeincomein2011.14However,halfoftheYouthLinkcohortwereeachemployedfewerthan296hoursduringtheyear,orlessthan6hoursperweekand,ofthem,128(15percent)reportedfewerthan52hoursofworkduringtheyear,oranaverageoflessthanonehourofpaidworkperweek.YouthLinkcohortmembers’annualhoursworkedduring2011isillustratedinChart5.TheconsequenceofthispatternofemploymentonearningsamongYouthLinkcohortmembersisdiscussedinthecomponentstudyonearningsandtaxes.14 U.S. Census Bureau, Current Population Survey, 2014 Annual Social and Economic Supplement, as cited in Belfield and Minnesota DEED.
1.6%
51.6%
32.5%
7.1% 7.1%
0%
10%
20%
30%
40%
50%
60%
NoHighSchool
SomeH.S. H.S.Graduate
GED SomeCollege
EducationAchievementofSampleof2011YouthLinkCohort,Age18+
Basedon10%Sample
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
25
Chart5:TotalannualhoursworkedbyYouthLinkcohortmembersduring2011.
Source:De-identifieddatafromDEED,analyzedbytheauthors.ThesedataontheeducationalattainmentandemploymentoftheYouthLink2011cohortindicatethat,asagroup,theseyouthareverysimilartothe“opportunityyouth”describedbyBelfieldandcolleagues.Like“opportunityyouth,”theYouthLink2011cohortlagsineducationandemployment,withsomewhoare“chronicopportunityyouth,”andtotallydisconnectedfromeducationandemployment,andsomewhoare“under-attached,”inthattheymayhavecompletedhighschoolandfoundlimitedemploymentbutarefarfromfullparticipantsintheeconomy.
23
106 87
356
166100
18050100150200250300350400
Lessthan10
10<50 50<100
100<500
500<1000
1000<2081
Atleast2081
Num
berofYouth
AnnualHoursWorked
TotalAnnualHoursWorkedbyYouthLinkCohort,2011
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
26
6.Short-termeconomicburdenEarningsandtaxesLowerearnings,andthelowertaxrevenuesthataccompanylowerearnings,representamajorcomponentoftheeconomicburdenofdisconnectedyouth.BecausemembersoftheYouthLinkcohortworkedandearnedlessthanthegeneralyouthpopulation,their“lostearnings”representaproductivitylosstothemaswellasasocialcosttotheeconomy.Becausetheyearncomparativelyless,alllevelsofgovernmentreceivelesstaxrevenue,whichrepresentsafiscalcosttoeveryoneelse.Inordertoraiseneededrevenue,everyoneelsemustpaymoreintaxestocompensateforwhattheyandotherdisconnectedyouthdonotpay.Asdiscussedabove,becausetheirearnedincomewaslower,membersoftheYouthLink2011cohortpaidmuchlessintaxesthanmostotherstheirage.15WeestimatetheannualsocialcostoftheYouthLink2011cohort’slowerearningsis$7.3millionandtheannualfiscalcostoftheirlowertaxesisnearly$1.8million.Asdiscussedabove,in2011,856(59percent)membersoftheYouthLinkcohorthadreportedearnings.ThemedianhourlyearningsofYouthLinkcohortmemberswas$8.16,whichiftheyworkedfulltime(2,080hours),wouldhaveledtoannualearningsof$16,973.However,becausemostcohortmembersworkedfarlessthanfulltime,theactualmean(wage)earningsforcohortmemberswere$3,930.Incontrast,60percentofallyouthreportedsomeincomein2011.16MeanearningsofthegeneralpopulationofU.S.youthaged16through24were$12,458,adifferenceof$8,528.Theearningsofallyouthincludedsomenon-wageincomeaswellasearningsofcollegegraduatesinthisagegroup.Assumingarandomsampleof1,451youth,59percentofwhomwereemployedin2011,wecouldexpectthattheirearningswouldbe$7,299,968greaterthantheearningsoftheYouthLink
15DatafromDEEDdonotincludenon-wageincome,suchasvariousstateandfederallyfundedsupportprogramsandearningsthatarenotreportedtoDEED,includingearningsfromemployerswhoarenotrequiredtoreportwagespaidtoDEED,transferpaymentssuchasSocialSecurity,unemploymentcompensation,variouswelfaresupports(examinedinthesectiondealingwithtransferpayments),illegalearnings,earningsfromfinancialmarkettransactions,andproceedsfromgambling.16U.S.CensusBureau,CurrentPopulationSurvey,2014AnnualSocialandEconomicSupplement,ascitedinBelfield,andMinnesotaDEED.
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
27
cohortmembers.Thisamountistheestimated“lostearnings”forcohortmembersduring2011andrepresentsacosttosociety.Alllevelsofgovernmentshareinthetaxlossduetolowerearnings.Averageearningsofcohortmembersweretoolowin2011forthemtopayanyfederalincometaxes,buttheypaidanaverageof$244inSocialSecuritytaxes.Theirincomeswerealsotoolowtopaystateincometaxes.However,accordingtothe2015MinnesotaTaxIncidenceStudy,cohortmemberswhohadearningspaidanaverageof$507instateandlocaltaxes,includingsalestaxesandindirectpropertytaxes.17Arandomsampleof1,451youthage16to24wouldhavepaidanestimated$431infederalincometaxes(afteradjustingformaritalstatusandfamilysize)and$772inSocialSecuritytaxes.Theyalsowouldhavepaidanaverageof$1,607instateandlocaltaxes,basedonthe2015MinnesotaTaxIncidenceStudy.ThecalculationoftheseestimatedlossesperworkerandmemberoftheYouthLinkandall-youthcohortsisshowninTable2.Thedifference,$1,215,representslosttaxespercohortmember.Table2:FederalandStateandLocaltaxes“lost”perperson(fiscalcostof“lost”taxes).
2011YouthLinkcohort Generalyouthpopulationcohort
Perworker Percohortmember Perworker Percohort
memberFederalincometaxes $0 $0 $431 $254
SocialSecuritytaxes(6.2%) $244 $144 $772 $455
MNstateandlocaltaxes $507 $299 $1,607 $948
Totaltaxespaid $751 $443 $2,810 $1,658
Totaltaxes"lost" $1,215Sources:MinnesotaDEED,U.S.CensusCurrentPopulationSurvey,IRSinstructionsfor2011taxpreparation,Minnesota2015TaxIncidenceStudy.Whencalculatedatthelevelofthecohort,thedifferenceintaxespaidbytheYouthLink2011cohortand1,451youthinthegeneralpopulationisabout$1.7millionperyear,asshowninTable3below.
17MinnesotaRevenueTaxResearchDivision.2015MinnesotaTaxIncidenceStudy:analysisofMinnesota’shouseholdandbusinesstaxes.March9,2015.Availableatwww.revenue.state.mn.us/research_stats/Pages/Tax_Incidence_studies.aspxAccessedOctober16,2015.
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
28
Table3:TotalFederal,StateandLocaltaxes“lost,”1,451youth. YouthLinkcohort Generalyouth
populationcohort Federalincometaxes $0 $369,256 SocialSecuritytaxes(6.2%) $208,864 $660,832 MNStateandLocaltaxes $433,966 $1,375,662 Totaltaxespaid $642,830 $2,405,750 Totaltaxes“lost” $1,732,920
Sources:MinnesotaDEED,U.S.CensusCurrentPopulationSurvey,IRSinstructionsfor2011taxpreparation,Minnesota2015TaxIncidenceStudy. CrimeYouthcommitadisproportionateshareofallcrimes;theages16-24encompassthepeaktimeofcriminalbehavioracrossthelifespan.Nationally,youtharearrestedfor37percentofallviolentcrimesand43percentofallpropertycrimes.Over300,000youthareinprisonorotherdetentionfacilities.18,19Criminalactivityishighlyconcentrated;mostyouthcommitnocrimes,but6percentofyouthcommithalfofallcrimes.20AsBelfieldandcolleaguespointout,“opportunityyouth”aremorelikelytobeinvolvedincrime,inpartbecausetheirincomesarelower.BelfieldandcolleaguesuseddatafromtheNationalLongitudinalSurveyofYouth1997(NLSY97),anationallyrepresentativelongitudinalsurveyofyouth,toestimatetheproportionofallyouthcrimethatiscommittedby“opportunityyouth.”TheNLSY97containsinformationonwhetherayouthwaseverarrestedandBelfieldandcolleaguescross-correlatethatwiththeirmeasureof“opportunityyouth”fromtheNLSY97.Basedontheiranalysis,“opportunityyouth”areresponsiblefor63percentofallyouthcrime,eventhoughtheyareonly17.3percentofthetotalyouthpopulation.Whilehigh,thisproportionfitswiththewell-establishedcorrelationbetweencrimeanddisadvantageand/orloweducation.
18FederalBureauofInvestigationUniformCrimeReports,2010,Table38.Availableathttps://www.fbi.gov/about-us/cjis/ucr/crime-in-the-u.s/2010/crime-in-the-u.s.-2010/tables/10tbl38.xls.AccessedOctober23,2015.19SickmundM,SladkyTJ,KangW,PuzzancheraC.2011.EasyAccesstotheCensusofJuvenilesinResidentialPlacement.2011.Availableathttp://www.ojjdp.gov/ojstatbb/ezacjrp/.AccessedOctober23,2015.20Belfield,page13,CohenandPiquero,2009;MerloandWolpin,2009;LochnerandMoretti,2004.
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
29
InformationthatwegatheredconfirmsthatmembersoftheYouthLink2011cohortwerearrestedforcriminalbehaviorfarmoreoftenthanaverageyouth.Arrestrecordsavailableonyoungadults,ages19-24,fromHennepinCountyindicatethat222youthoutof1,035cohortmembersofthatagegroup—morethanoneinfive—werearrestedduring2011.Theseyouthwerearrested436times,anaverageofnearlytwoarrestsperpersonarrested,andincarceratedfor2,771daysduringtheyear.Weimputedarrestsfor16-18yearoldmembersoftheYouthLink2011cohort,sincearrestdataforjuvenilesareunavailable.Weimputedarrestsbasedonthefactthat16-18yearoldswereinvolvedin31.4percentofarrestsamongall16-24yearoldsinU.S.crimedatain2010.Onthisbasis,weestimate200arrestsfor16-18yearoldcohortmembers,meaningthattherewereanestimated636arrestsintheYouthLink2011cohort.Comparedwithageneralcohortofyouthofthesameages,YouthLinkclientswerearrested7.1timesasoften.ThetypesofcrimesforwhichmembersoftheYouthLinkcohortwerearrestedareshowninapercentagedistributioninChart6,whichalsodisplayscomparabledataonarrestsofallyouthofthesameagesnationallyduring2010.
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
30
Chart6:Arrestsbycrime(percentofallarrests),YouthLinkcohortages19–24andallyouthages19–24.
Sources:HennepinCountyandU.S.DepartmentofJusticearrestreportsbyagegroup.Seehttp://www.fbi.gov/about-us/cjis/ucr/crime-in-the-u.s/2010/crime-in-the-u.s.-2010/tables/10tbl38.xls.ThedatainChart6areorderedbythefrequencyofarrestsfortheYouthLinkcohortmembers.In2011,nooneintheYouthLinkcohortwasarrestedformurder,themostviolentcrime,although0.1percentoftotalarrestsforthisagegroupnationallywereformurderormanslaughter.AdistressingnumberofarrestsamongYouthLinkcohortmemberswereforoffensesagainstfamilyandchildren.Taxpayerspaythecostofthecriminaljusticesystem,includingpolicingandadjudication,incarcerationandcrimepreventionbyagenciesrangingfromtheBureauofAlcohol,Tobacco,andFirearmstotheDrugEnforcementAdministration,among54separateagencies,manyofwhichserveyouthinsomemeasure.Acrossallyouthaged16-24,federal,stateandlocalagenciesspent$75.1billiononcrimein2007,or$83.2billionin2012(adjustedbytheConsumerPriceIndex).Thisis30.4percentoftotalcrimespending.21WefollowBelfieldandcolleagues’approachtoestimatetheexcessexpensetothecriminaljusticesystemincurredbytheYouthLink2011cohort,butadjustedthosedatatolocalpopulationsandexpenditures.Inordertoestimatelocalcosts,werely,
21Belfield,p.13.
0%
5%
10%
15%
20%
25%
PercentageDistributionofArrestsbyCrimeforYouthLink2011Cohort,Ages19-24in2011
andAllYouthinU.S.,Ages19-24in2010
YouthLinkcohort%
Allyouth
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
31
likeBelfieldandcolleagues,ontheU.S.CensusofGovernments(COG)dataforspendinginMinnesota,HennepinCountyandMinneapolis.22Usingpopulationcensusdatafromthesameareas,wethenestimatedtotalandperpersoncostsforpolice,correctionsandjudicialandlegalactivitiesatthefederal,state,countyandcitylevels.WedidthisbyapplyingBelfieldandcolleagues’keyestimatesoftheshareofcrimeattributabletoallyouth(30.4percentofallcrime)andtoopportunityyouth(63percentofyouthcrime),respectively,toallocatetotalspendingonthecriminaljusticesystemforallyouthateachlevelofgovernment.Finally,weallocatecoststoestimatesof“opportunityyouth”andnon-“opportunityyouth”inordertocalculateexcesscosts.In2012,criminaljusticespendingonMinnesotayouthbythefederal,state,HennepinCounty,andMinneapolisgovernmentswas$9,213per“opportunityyouth”and$1,132pernon-“opportunityyouth,”adifferenceof$8,081.ThisamountistheestimatedexcessspendingperopportunityyouthinMinnesota.FortheentireYouthLink2011cohort,theestimatedexcessspendingtotals$11,725,212.Anadditionaleconomicburdenofcriminalactivity—asocialcostnotpaidbytaxpayers—isthecostsdirectlyimposedonvictims,andexpendituresbyvictimsandpotentialvictimsonavoidanceofcrime.FollowingBelfieldandcolleagues,wetranslatethecriminalactivityoftheYouthLink2011cohortintoexcesscoststovictimsbasedontheworkofMilleretal.23Millerandcolleaguesfocusonestimatingthecostsofspecifictypesofcrime,includingtangiblelossessuchashealthcarecosts,lostearningsandpublicprogramcostsrelatedtovictimassistance,andintangiblecostsforpain,sufferingandreducedqualityoflife.Thesecostsexcludetheimpactofcrime-inducedfearonsociety.FollowingBelfieldandcolleagues’methods,weuseMillerandcolleagues’estimatesofthevictimcostsofspecifictypesofcrimes,asshowninChart7.
22TheCOGisasurveyofallunitsofgovernment(exceptthesmallestones)intheUnitedStates.TheCensusisperformedevery5yearsinyearsendingin7and2.Annualsamplesaretakenintheintermediateyears,butthedataintheintermediateyearsisnotreportedinsufficientdetailtobeusefulhere.Weuseexpendituredatafromthe2012censusforthefederalgovernment,alongwithdataforMinnesota,HennepinCounty,andthecityofMinneapolis.23MillerTR,CohenMA,WiersemaB.1996.Victimcostsandconsequences:anewlook.NationalInstituteofJusticeResearchReport,NCJ-155282.Thesecostswereupdatedto2011valuesbyBelfieldandcolleagues.
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
32
Chart7:Estimatedtangibleandintangiblevictimcostspertypeofcrime,expressedin2011dollars,followingMilleretal.1996.
ToestimatetheexcessvictimcostsofcrimeincurredduetocriminalbehavioroftheYouthLinkcohortwemultipliedtheexcessnumberofcrimesforwhichYouthLinkcohortmemberswerearrested,showninChart6,bytheestimatedcostpertypeofcrimeshowninTable7.ItisimportanttonotethatYouthLinkcohortmemberswerenotarrestedduringthisyearformurderornon-negligentmanslaughter,forwhichtheestimatedaveragevictimcostismorethan$5.3million,orforforciblerapeorarson,twoothercrimeswithhighervictimcosts.Table4reportstheestimatedexcesscostsfortheYouthLink2011cohort.
$0 $20,000 $40,000 $60,000 $80,000
$100,000 $120,000 $140,000 $160,000 $180,000
Victim Costs per Crime Expressed in 2011 Dollars
Excludes murder and non-negligent manslaughter for which victim cost per crime = $5,315,805 YL cohort had no murder, forcible rape or arson arrests
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
33
Table4:EstimatedexcessvictimcostsforYouthLink2011cohort.
YouthLink16-24 USpopulation16-24
Victimcostsperarrest $14,904 $15,088 Victimcostspercohortmember $6,533 $1,363 Excesscostspercohortmember $5,170 Victimcostsfor1,451youth $9,478,891 $1,974,811 ExcessYouthLinkvictimcosts $7,504,080
Source:Authors’analysesbasedonMillerandcolleaguesandHennepinCountyandU.S.DepartmentofJusticearrestreportsbyagegroup.Theestimatedexcessvictimcostofmorethan$7.5millionfortheYouthLinkcohortisaconservativeestimate,inpartbecausetherewerenoarrestsintheYouthLinkcohortformurderin2011.TheUSpopulationcostsusedforcomparisonincludeasmallnumberofarrestsformurder,whichraisesthecostsperarrestandpercohortmemberconsiderably.WerethehighvictimcostsofmurderexcludedfromtheUSpopulationcomparisontheexcessYouthLinkcohortcostswouldbeconsiderablygreater.HealthAlthoughitisoftendifficulttodistinguishbetweenthecausesandconsequencesofyouthexperiencinghomelessness,thereislittledoubtthatlivingonthestreetisstronglyassociatedwithloneliness,emotionaldistress,depressionandincreasedriskofphysicalhealthproblems.24Becausetheyareontheirown,andunemployedoronlymarginallyemployed,youthexperiencinghomelessnessarerarelycoveredbycommercialhealthinsuranceplanssotheytypicallyaccessmentalandphysicalhealthservicesthroughhospitalemergencydepartmentsorcommunityclinics.PaymentfortheseservicesmaybethroughMedicaidwhentheycanbeenrolled,orthecostmaybewrittenoffasuncompensatedcare.InordertotracktheutilizationandcostsofhealthservicesforYouthLinkclients,weobtainedde-identifiedclaimsdatafromtheMinnesotaDepartmentofHumanServices(DHS),withassistancefromtheHennepinCountyOfficetoEndHomelessness.ThesecomprehensivedatareportedpaidclaimsbyDHSonbehalfof
24ThompsonSJ,BenderK,WindsorL,CookM,WilliamsT.Homelessyouth:characteristics,contributingfactors,andserviceoptions.JHumanBehaviorintheSocialEnvironment,2010(20):193–217.
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
34
YouthLinkclientsbetweenJanuary2011andJune2012providedbyallhealthcareserviceproviders,throughallDHSprograms,thelargestofwhichwereMedicalAssistanceandMinnesotaCare.Thedataincludedprepaidandfee-for-serviceclaims,whichwereoftenusedbecauseyouthcycleonandoffeligibility,sometimesasfrequentlyasmonthly.Becauseofthismixoftypesofclaims,datawereanalyzedonapermemberpermonth(PMPM)basis.Providerscouldnotbeidentifiedbecauselineitemdetailontheclaimswasnotprovided,butitisknownthatmajorprovidersfortheseyouthincludeHennepinCountyMedicalCenter,NorthMemorialMedicalCenterandRedDoorClinic.StaffofHennepinCountyHealthCarefortheHomelessestimateduncompensatedcostswere20percentoftotalcosts.ComparisondatafortheyouthpopulationwereobtainedfromtheMedicalExpenditurePanelSurvey(MEPS),maintainedbythefederalAgencyforHealthcareResearchandQuality.MEPSisasetoflarge-scalesurveysoffamiliesandindividuals,theirmedicalprovidersandemployers,andiswidelyconsideredthemostcompletesourceofdataonthecostanduseofhealthcareandhealthinsurancecoverageintheUnitedStates.25ComparisondatafromMEPSreportonhealthcarecostsforprivatelyinsuredyouthintheMidwestduring2011.Table5describestheaverageperpersonandcohortcostsfortheYouthLinkcohortsandacomparisongroupof1,451averageyouth.
25MEPStablesareavailablethroughhttp://meps.ahrq.gov/mepsweb/
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
35
Table5:ComparisonofYouthLinkandaverageyouthhealthcarecosts,2011.
ExcesshealthcarecostsforYouthLinkclients YouthLink(YL)Costs
DHSpaymentspermemberperyear(PMPY)forYLcohort $2,549 Estimateduncompensatedcare,20% $510 PMPYforYLcohortincludinguncompensatedcare $3,059 TotalestimatedcostforYL2011cohortof1,451 $4,438,301 AverageYouthCosts
MEPSmeanPMPYforprivatelyinsuredyouthages16-24 $2,265 MEPS2011totalestimatedcostforcohortof1,451 $3,286,515 Comparison
Excess2011perpersoncostforYouthLinkcohort $794 Excess2011costforYouthLinkcohortof1,451 $1,151,786
Sources:DHSDataWarehouse,MMISClaimsTablesasof2/11/2015,JohannaLewis,dataanalyst;MEPS2011dataonprivatelyinsuredMidwestyouth;HennepinCountyHealthCarefortheHomeless.Asindicated,theexcessperpersoncostfortheYouthLinkcohortwas$794,whichrepresentsapproximately$1.2millioninexcesscostsforthecohort,coststhatarebornebytaxpayersandareacosttosociety.ThecostdifferenceisunderstatedbecausethereimbursementrateforservicespaidbyDHSislowerthanpaymentsbycommercialinsurers.AlthoughthecostsfortheYouthLinkclientswereonly35percenthigher,theutilizationpatternoftheYouthLinkclientsdifferedgreatlyfromthatofaverageyouth.OftheYouthLinkclientsforwhomDHSpaidforhealthservices,79percenthadatleastoneemergencydepartmentclaim.Amongaverageyouth,only13percenthadoneormoresuchclaim.Inaddition,abouthalfoftheYouthLinkclientsalsohadoutpatientclaimsformentalhealthandchemicaldependencyservices. WelfareandsocialsupportsTransferpaymentsarethelargestcomponentofpublicsupportformembersoftheYouthLink2011cohort.Suchpaymentsprovidebasicsupportforpeoplewhoareunabletowork.Transferpaymentsaresupportedbytaxesandalsorepresentasocialcost.Theyarepaidbyaunitofgovernment(typicallythefederalorcountygovernment)toindividuals,forwhichtheindividualdoesnotsupplyanypayment,good,orserviceinexchange.Wereceivedde-identifiedindividual-leveldatafromHennepinCountyontransferpaymentstomembersoftheYouthLinkcohort.
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
36
Nearlyall(1,264,87percent)membersofthe2011YouthLinkcohortreceivedatleastoneofthreedifferenttypesoftransferpayment:Generalassistance(GA),SupplementalNutritionalAssistanceProgram(SNAP),formerlycalledfoodstamps,andMinnesotaFamilyInvestmentProgram(MFIP),formerlycalledAidtoFamilieswithDependentChildrenorAFDC.26GeneralAssistanceistemporarycashbenefitspaidtochildlesspeopleage16through64whocannotsupportthemselves.27Thesupportislimitedtosixmonthsofeligibility,whichmaybeextendedundersomecircumstances.Supportis$203permonthforindividualsand$260forcouples,amountsthathavenotbeenadjustedsince1987.RecipientsareusuallyalsoeligibletoreceiveSNAPandhealthcarebenefits.In2011,352membersoftheYouthLinkcohortreceivedGAbenefits.Sixteenofthemreceivedanextensionoftheirbenefitsorreappliedafteraninterim.Theaveragebenefitperiodlasted9.7monthsduring2011.ThetotalcostoftheYouthLinkcohort’sGAbenefitsin2011was$693,123,or$478permemberofthecohort,assumingallrecipientsweresingle.TheSupplementalNutritionalAssistanceProgramandFoodSupportprogramswereusedbymorecohortmembersthananyothertransferpaymentprogram.In2011,1,056cohortmembers(73percent)receivedSNAPorFoodSupportassistance.Theprogramsprovidefoodsupportforpeopleinneed,asdefinedbytheirincomeandassets.Eligibilityfortheseprogramsneedstoberegularlyupdatedandislimitedtothreemonthsunlesstherecipientisworkingatleasthalftimeorinschool.Thecurrentallotments,whichhavenotbeenincreasedformanyyears,arebasedonhouseholdsize.Theamountofassistancerangesfrom$200permonthforasinglepersonto$526forahouseholdof3.TocalculatethecostofSNAPweassumed—basedonadvicefromHennepinCountystaff—thatpeoplereceivingSNAPonlyweresinglewithnochildrenandthosereceivingMFIPandFoodSupportlivedin3-personhouseholds(oneadultwithtwochildren).Theamountofassistancewasbasedonthenumberofmonthseachpersonreceivedassistanceduring2011.TheseresultsaresummarizedinTable6below.
26Manyalsobenefittedfromsomeotheraidprograms,includinghealthcaresupportandemergencyassistance.Theseaidprogramsarenottransferpaymentsbecausetheyarepaymentsmadebythegovernmentascompensationforgoodsorservicesprovidedbyothersforsomeonewhoiseligibletohavethegovernmentpayforthesegoodsorservices.Suchcostsareconsideredinthesectionsdealingwithhousingandhealthcarebenefits,bothofwhicharepubliclyfundedsupportprogramsthatarenottransferpayments.27Foryouthages16-17thisprogramiscalledGAforMinors.
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
37
Table6:CostofSNAPassistancetoYouthLinkcohortmembersduring2011. Allotmenttype
Numberofrecipients
Totalcost
Costperrecipient
Costpercohortmember
SNAPonly 843 $938,644 $1,113 $647 MFIPandfoodsupport 213 $435,631 $2,045 $300 Total 1,056 $1,374,285 $1,301 $947
Source:HennepinCounty.TheMinnesotaFamilyAssistanceProgram(MFIP)providessupportforneedyfamilieswithchildrenthathaveverylimitedincomeandassets.Therearethreeseparatephasestotheprogram:
• DiversionaryWorkProgram(DWP)• MFIPandchildcaresupport—limitedtolifetimeassistancenotexceeding60
months,withsomeexceptionsforcertainhardships• Additionalemploymentsupportbeginninginthe48thmonthofreceiving
MFIPTheDWPisafour-monthlongprogramthathelpsparentsfindemploymentbeforereceivingMFIP.Itisachancetoletparentslearnwhethertheycansupportthemselvesandtheirchildrenwithsomeassistance.Participantsintheprogramreceivesomecashassistance,employmentsupport,andchildcareassistance.ThetimespentintheDWPdoesnotcountagainstthe60monthlimitofreceivingMFIP.PregnantwomenareeligibletoreceiveMFIP,andrecipientsmayreceiveanadditionalgrantforchildcare.ChildrenmayremaineligibletocontinuetoreceiveSNAPifparentsbecomeineligibletoreceiveSNAP.28MFIPrecipientsareeligibletoreceiveemploymentsupport,healthcarebenefits,andcollegeassistance.The60monthlifetimelimittoreceivingMFIPbenefitsmaybeextendedunderspecialcircumstances.HennepinCountydataindicatethatin2011,6percentoftheYouthLinkrecipientsand13percentofallMFIPrecipientshadreceivedbenefitsformorethan60months.In2011,373membersofthecohortreceivedMFIPsupportfromHennepinCounty,10ofwhomalsohadreceivedatleast48monthsofsupportandwereeligibletoreceiveemploymentsupportastheytransitionedtowork.WecalculatedMFIPsupportusingtheactualnumberofmonthseachcohortmemberreceivedMFIP28Thisisasituationthatcouldoccurunderavarietyofsituations.IftheheadofahouseholdweretobecomeeligibleforSocialSecuritydisabilityincome,forexample,theheadofthehouseholdwouldnolongerbeeligibleforMFIPandSNAP,butifthedisabilityincomewerelowenough,anychildreninthehouseholdwouldcontinuetobeeligibleforSNAP.
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
38
supportin2011.HennepinCountyestimatesthatmostyouthwhoreceiveMFIParesinglewithtwochildren,typicallyoneinfantandonetoddler.Lackingdirectinformationonthenumberofmonthsofchildcareusedbytheserecipients,weassumedconservativelythatonaveragehalfreceivedchildcaresupportatanygiventime,basedonadvicefromHennepinCountystaff.Withtheseassumptions,averagemonthlysupportwas$1,469,includingchildcaresupport.Employmentsupportcost$1,020perrecipient.ThetotalcostforMFIPandemploymentsupportwas$4,278,352,or$2,942percohortmember.TheseresultsaredetailedinTable7below.Table7:CostofMFIPassistancetoYouthLinkcohortmembersduring2011.
Numberofrecipients
Monthlyamount
Totalcost
Costpercohortmember
MFIP,includingchildcare 373 $1,469 $4,268,152 $2,942 Employmentsupport 10 $1,020 $10,200 $7 Total $4,278,352 $2,949
Source:HennepinCounty.Totalcostfortransferpaymentstocohortmembersduring2011wasapproximately$6.3millionduring2011,or$4,374percohortmember.ThistotalincludespaymentsforGeneralAssistance(GA),foodsupport(SNAP)andfamilysupport(MFIP).ThesetotalsarereportedbelowinTable8.Table8:TotalcostoftransferpaymentstoYouthLinkcohortmembersduring2011. Program
Numberofrecipients
Totalcostin2011
Costpercohortmember
GeneralAssistance 352 $693,123 $478 SNAP 1,056 $1,374,285 $747 MFIP 373 $4,278,352 $2,949 Total $6,345,760 $4,374
Source:HennepinCounty.Sincethecostperpersonofthesetransferprogramstoyouthinthegeneralpopulationisverysmall,wedidnotestimateanexcesscostinthiscategory.Thecostsidentifiedherearethecostsofthebenefitsonly,anddonotincludethecostofadministeringtheseprograms.Inadditiontotransferpayments,othersocialsupportprogramsexisttoamelioratetheeconomicandsocialchallengesofdisadvantagedyouth.AwidevarietyofprogramsdesignedtoaddressthevariousneedsofyoungadultsaresupportedbytheU.S.DepartmentsofLabor,HealthandHumanServices,EducationandJustice,
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
39
andadministeredbyfederal,state,countyandcityagencies.Nationally,suchprogramsincludeJobCorps,WorkforceInvestmentActYouthActivities,YouthBuild,YouthOffenderGrants,ChafeeFosterCareIndependenceProgram,RunawayandHomelessYouthProgram,AdultEducationBasicGrantstoStates(excludingamountstopersonsaged25andabove),WorkplaceandCommunityTransitionTrainingforIncarceratedYouth,EducationforHomelessChildrenandYouth,andTitleI-Dprograms.Unlikeothertypesofcosts,wewereunabletoidentifylocalsourcesthatwouldhavemadeitpossibletoestimatetheparticipationbytheYouthLinkcohortinthesemanysocialsupportprogramsandtoestimatetheircostsdirectlyin2011.Instead,weapplythecostper“opportunityyouth”estimatedbyBelfieldandcolleagues.29TheydrawonarecenttabulationbytheGeneralAccountingOfficeofsuchprograms,andassumethat“opportunityyouth”relyontheseprogramsinthesameheightenedproportionastheyreceivepublicassistancepayments.30Thisyieldsanextraestimatedamountspenton“opportunityyouth”of$430peryouthin2011dollarsbasedon2006appropriations.AppliedtotheYouthLinkcohort,theestimatedexcesscostofsocialsupportprogramstotaxpayersandsocietyis$623,930.EducationEducationisoneareawherethereisa“savings”totaxpayersandsocietyfortheYouthLink2011cohort.The“savings”ingovernmentsubsidiesandprivatelypaidfeesoccurbecausefewerYouthLinkcohortmembersattendeitherhighschoolorcollegethanotherstheirageinthegeneralyouthpopulation.Ofcourse,theseshort-term“savings”leadtoalong-termburden,becauseeducationisanimportantpathwaytowardgreaterfutureearnings.Weexaminethecost“savings”fortheYouthLinkcohortintwoareas:highschoolandpost-secondaryeducation.Theestimateforhighschool“savings”isthenetofdecreasedpubliccostsofeducationduetolowerenrollmentamonghighschoolagedyouthandincreasedpubliccostsofeducationduetohigherenrollmentinhighschoolamongpost-highschoolagedyouth.Theseestimated“savings”benefitbothtaxpayersandsociety,atleastintheshort-term.Weobtainedde-identifiedindividualleveldata,includingstudentage,onenrollmentbymembersoftheYouthLink2011cohortfromtheMinneapolisPublicSchools(MPS).Foranalysis,wedividedthecohortbyageintothosewhowereage18andunder(highschoolage),andthosewhowereage19orgreater(posthighschoolage)during2011.WecomparedtheYouthLink29Belfield,p.14.30GovernmentAccountabilityOffice(GAO).DisconnectedYouth:FederalActionCouldAddressSomeoftheChallengesFacedbyLocalProgramsThatReconnectYouthtoEducationandEmployment.2008.GAO-08-313.Availableathttp://www.gao.gov/new.items/d08313.pdf.AccessedNovember3,2015.
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
40
enrollmentpatternstonationaldatafromtheU.S.CensusBureauCurrentPopulationSurveyonenrollmentin2011bythesameagerangestodeterminereducedorexcessenrollmentintheYouthLinkcohort.WealsostandardizedMPSdatatotheYouthLinkcohortagerangesinordertoestimatecohortandperpersoncosts.Wederivedtheperpupilaveragehighschoolexpenseof$21,290fromtheMPSAnnualFinancialReportfor2011-2012.Thisamountrepresentsthefullyweightedcostperpupil,applyingtheperpupilweightstatedintheMinnesotaDepartmentofEducationLevyLimitationandCertificationReport.MPSrecordscontainenrollmenthistoryon66.8percentoftheYouthLink2011cohort.AnalysisindicatesthatamongthosemembersoftheYouthLinkcohortwhoseenrollmenthistorycouldbefoundinMPSrecords,26.8percentofhighschoolageyouthwerenotenrolledduring2011.Thisrateofnon-enrollmentismorethantwicetherateamonghighschoolageyouthnationally,andtranslatesintoa“savings”of$1,213,530,or$853perYouthLinkcohortmember.Analysisrevealed,however,thatmanyYouthLinkcohortmembersbeyondhighschoolagewerestillenrolledinhighschoolduring2011.Apparently,someoftheseyouthfailedtograduatewithmostoftheirpeersandwerestilltryingtofinishtheirsecondaryeducation.AmongtheYouthLinkcohort,21.7percentofposthighschoolageyouthwereenrolledinhighschoolduringtheyear,comparedwithonly2.8percentofyouthnationallywhowerenotenrolledincollege.TheseYouthLinkhighschoolstudentsimposedanadditionalexpenseof$2,171,580,or$1,527inexcesscostperYouthLinkcohortmember.Usingde-identifiedenrollmentinformationfromtheMinnesotaStateCollegesandUniversitiessystem(MnSCU),wealsofoundthat,despitetheircurrentdifficulties,9.7percentofpostsecondaryageYouthLinkcohortmemberswereenrolledduring2011.31Althoughencouraging,thisrateofcollegeenrollmentismuchlowerthanthatofsimilarageyouthnationally(32.5percent).TheMnSCUcollegemostfrequentlyattendedbyYouthLinkcohortmembersin2011wastheMinneapolisCommunityandTechnicalCollege(MCTC).Theaveragecostperstudentduring2011atMCTCwas$7,284,ofwhich$5,594wassubsidizedbytaxpayers,basedontheMCTC2011AuditedFinancialStatement.Atthatcost,thecomparativelylowerenrollmentrateoftheYouthLinkcohorttranslatesintoafiscal“savings”of$1,288,841,or$888perYouthLinkcohortmember.OfthetotalaveragecostofMCTC,theremainder,$1,677,wasusuallypaidbystudents.Thecomparativelylowerenrollmentratetranslatesintoasocial“savings”of$386,351,or$266perYouthLinkcohortmember.These“savings”aresummarizedinTable9.
31MFIPrecipientswhoarehighschoolgraduatesmayattendMnSCUinstitutionsatnocharge.
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
41
Table9:SummaryofYouthLink2011cohorteducationfiscalandsocial“savings.”
2011YouthLinkcohort YouthLinkperperson
Highschoolageunderenrollment ($1,213,530) ($853)
Overhighschoolageoverenrollment $2,171,580 $1,527
Post-Secondaryunderenrollmentfiscalsavings ($1,288,841) ($888)
Netfiscaleducationsavings ($330,791) ($233) Post-Secondaryunderenrollmentprivatesavings ($386,351) ($266) Sources:MinneapolisPublicSchools,MinnesotaStateCollegesandUniversitiessystem,MinneapolisCommunityandTechnicalCollege,U.S.CensusBureauCurrentPopulationSurvey.HousingMembersoftheYouthLink2011cohortwere,byvirtueofbecomingYouthLinkclients,experiencinghomelessnessoratriskofhomelessnessduringsomeorallof2011.Thisdifferencewith“opportunityyouth,”mostofwhomarenothomeless,requiresthatweaddthesecoststothosethatBelfieldandcolleaguesconsidered.Weestimatethecostsofhousingcohortmembersintemporarysingleadultandfamilyshelters,youthshelters,supportivehousing,andfinancialsupportprovidedthroughtheHennepinCountyEmergencyAssistanceProgram.Informalhousingcostsincurredbyfamiliesorfriendsofcohortmemberswithwhomtheymayhavestayedarenotincluded.TemporarysingleadultandfamilysheltersareoneresourcethatsomemembersoftheYouthLink2011cohortuse.Thelargestsuchsheltersoftenusedbycohortmembers,andtheirnightlycostsin2011,are:
• PeopleServingPeopleforfamilies,$38perdayforadultsand$27forchildren,99beds,plus10twobedroomapartments
• HarborLights,$6to$36perday,varioustypesofhousing• SalvationArmy,$6.50pernight,securewaitingspace
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
42
• CatholicCharities,$6.50pernight,securewaitingspaceUtilizationdatawereavailableontheadultsingleandfamilysheltersfromaHumphreyInstituteCapstoneProjectstudyledbyProfessorMariaHanratty,whoperformedanadditionalanalysisrequestedbytheauthors.32Table10summarizestheuseandcostsofthesesheltersbycohortmembers.Table10:UseandcostsoftemporarysheltersbyYouthLink2011cohortmembers.
Family Adult Cohortmembersserved 48 128 Totalnightsinshelters 2,105 3,922 Averagenightsperuser 43.7 30.5 Totalcost $133,492 $92,037 Totalcostperuser $2,772 $717 Totalcostpercohortmember $92 $63
Sources:ProfessorMariaHanratty;HennepinCountyProjecttoEndHomelessness.Youthsheltersprovideamuchmorecomprehensivesetofservicestoasmallnumberofyouth.Thesesheltersarebuiltonasocialservicemodel,andservicesrangefromfoodtocounseling.Lengthsofstayaretypicallylongerthanthoseattemporarysingleadultandfamilyshelters.Atotalof46suchbedswereavailableacrossfourshelters,includingeightatYouthLinkduring2011.Theseyouthshelters,theirnightlycosts,andstaffestimatesoftheirnightlyusebyYouthLinkclients,are:
• Avenues,$138pernight,8of16bedstypicallyusedbyYouthLinkclients• HopeStreet,$117pernight,5of16bedstypicallyusedbyYouthLinkclients• SafeHouse,$151pernight,3of6bedstypicallyusedbyYouthLinkclients• YouthLink,$41pernight,8beds(operationalin2011)
Theweightedaveragecostpernightperbedwas$103acrossthese24beds,includingtheeightatYouthLink,thatwereusedbyyouthwhoalsoattendedYouthLinkandwerethereforemembersofthe2011YouthLinkcohort.Thetotalannualcostforthesesheltersandserviceswas$901,550,or$37,565perbed.Theannualcostper2011YouthLinkcohortmemberwas$621.
32WilliamsQ,OhY,ZhuW,ButtkeD,HanrattyM.AcloserlookatyouthhomelessnessinHennepinCounty:finalcapstonereport.UniversityofMinnesota:HumphreyInstitute.June5,2015.
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
43
SomeYouthLink2011cohortmembershadtheopportunitytoliveinsupportivehousing.During2011,YouthLinkpartneredwithotheragenciestooperatethreesuchapartmenthouses,Archdale,St.Barnabas,andNicolletSquare,withatotalof118apartments,includingsevenscatteredsiteunitsforteenparents.Theneedfortheseunits,inwhichthetypicalstayis1.5to2years,vastlyexceedssupplyandvacanciesarefilledbylottery.YouthLinkstaffstheseunits,whichaccountsforathirdofYouthLink’sannualbudget.MostoftheseunitsaretypicallyoccupiedbyyouthwhoarealsoYouthLinkclients.WelearnedthatinApril,2013,99oftheseunits,or83.9percentoftheunitsinthesethreesupportivehousingcomplexes,currentlyhousedYouthLinkclients.In2011,YouthLink’shousing-relatedprogramcostsfor99apartmentswere$909,979.AssumingasimilarnumberofYouthLink2011cohortmemberswerehousedinsupportivehousingunits,weestimatetherelatedcostsforthecohortin2011.Themarketvalueofthemonthlyrentalcostfortheseunitsinthatyearwas$605,andwassubsidizedwithpublicfunds.Youthcontributeagrowingportionofthemonthlycostastheircircumstancesallow,butaccordingtoYouthLinkandhousingstaff,atthattimetheaverageoccupantcontributed$205monthlyatNicolletSquare,and$107monthlyatArchdaleandSt.Barnabas.Withtheseinputs,thetotalhousingcostfor99unitswas$718,740,ofwhichyouthoccupantspaid$168,555and$550,185wassubsidized.IncludingthecostoftheYouthLinkhousing-relatedprogram,thetotalsubsidizedcostforsupportivehousingwas$1,460,164,or$14,749peruserand$1,006perYouthLink2011cohortmember.Inaddition,theYouthMobileTeamprovidessubsidizedhousing,alongwithavarietyofsupportiveservices,forasmall,fluctuatingnumberofyouthwiththegreatestbarrierstoobtaininghousing,mostofwhomaresomewhatolderthantheaverageYouthLinkclient.In2011,YouthLinkexpendituresfortheYouthMobileTeam,includingrentpaymentsonbehalfoftheseyouth,were$382,185,or$263percohortmember.Inaddition,26YouthLink2011cohortmembersspenttimeinthefostercaresystem.Theseyouthhadanaggregatelengthofstayof218.95monthsduring2011,oranaveragelengthofstayof8.42monthsperfostercareuser.Thetotalpaymentforfostercarewas$328,764,or$12,645perfostercareuserand$227percohortmember.Finally,theHennepinCountyEmergencyAssistanceProgram(EA)providedlimitedfinancialsupporttosomeYouthLink2011cohortmemberswhowereatriskofbecominghomelessoralreadyexperiencinghomelessness.Suchsupportislimitedtoonceperyearandamaximumof$3,000,andmaybeusedtopayforayouth’s
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
44
firstmonthofrentandutilitiesortopreventyouthbecominghomelessbypayingforsuchthingsasbackrentorutilities.33In2011,therewere243EApaymentstomembersoftheYouthLink2011cohorttotalinganestimated$317,601,or$1,307peruserand$219perYouthLink2011cohortmember.Inordertoestimatethecontributionsoftheseyouthtotheirownhousingcosts,weassumedthatall243recipientsofEApaidrentof$605permonth,minuswhatwassubsidizedbyEA.Basedontheseassumptions,thetotalcostfor243youth-headedhouseholdswas$1,764,180,andtheseyouthpaidatotalof$1,446,579outofpocketfortheirhousing.ThepubliclysubsidizedhousingcostsfortheYouthLink2011cohortaresummarizedinTable11.Table11:SummaryofestimatedhousingcostsforYouthLink2011cohort.
2011costperperson
2011cohorttotalcost
EmergencyAssistance $219 $317,601 Youthshelter $621 $901,550 Temporarysingleadultshelter $63 $92,037 Temporaryfamilyshelter $92 $133,492 SupportivehousingandYouthMobileTeam $1,269 $1,842,349 Fostercare $227 $328,764 Totalestimatedhousingcosts $2,491 $3,615,793
Source:Authors’analyses.Determininghowmuchoftheestimatedhousingcostforthecohortisexcesscost,beyondthatwhichmaybeincurredtohouseaverageyouth,presentsachallenge.DatafromtheU.S.DepartmentofAgriculture,CenterforNutritionPolicyandPromotion,indicatethattheaveragecostnationallyofhousingayoungpersonin2011forfamilieswithincomesunder$57,600was$2,988.Basedonthisaverage,thecostfor1,451youthlivingathomewouldhavebeen$4,335,588,substantiallymorethantheestimatedcostofhousingfortheYouthLink2011cohort,describedinTable11,whichis$3,615,793.However,YouthLinkcohortmemberspaidanestimated$168,555forsupportivehousingand$1,446,579forrent,asnotedabove,therebycontributing$1,615,134outofpocket.Ifonefactorsinthisprivate
33EAisprovidedbythecounty,butitisnotatransferpayment.Itisapaymenttoavendorforgoodsandservices.
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
45
contributionbyYouthLinkclients,subtractingitfromthecostofprivatelyhousingtheseyouth,thepubliccostisactually$895,339higher.Notonlyisthepubliccostnearly$900,000higherthanwhatitwouldhavecosttoprivatelyhouseeverymemberoftheYouthLinkcohortfortheyear,themajorityofthecohortmemberswereprobablynothousedforatleastpartoftheyear.Unfortunately,wehaveincompleteinformationaboutthehousingstatusofcohortmembers.Asdiscussedabove,wehavesomeindicationofthehousingstatusof243youthwhoreceivedEAduringtheyear,176youthwhostayedintemporarysingleadultandfamilysheltersduringsomepartoftheyear,24youthwhostayedinyouthsheltersduringsomepartoftheyear,26youthwhowereinfostercareand99youthwhowereinsupportivehousingforatleastpartoftheyear.Wehavenohousinginformationatallontheremaining883(60.9percent)membersofthecohort.Duringpartoftheyear,someoftheseyouthmayhavebeenlivingwiththeirfamiliesoforiginandsomemayhavepaidforhousingprivately,whichwouldhavereducedthedifferencebetweenthetotalprivatecostofhousing1,451youthandwhatweknowthepublicpaidtohouseatleastsomeoftheseyouthatleastpartoftheyear.Onewaytothinkaboutthiscomparisonisthatitrepresentsashiftinfundingfromtheprivatetothepublicsector.Thetotalestimatedprivatecosttohousecohortmembersfortheyearinfamilyhomeswouldhavebeen$4,335,588,andthecohortmemberswholivedinsupportivehousingandthosewhoreceivedEAinfactpaidanestimated$1,615,134outofpocket.TheestimatedpubliccostofhousingthemembersoftheYouthLink2011cohortthroughEA,variousshelters,supportivehousingandfostercarewas$3,615,793.Thisshiftfromprivatetopublicpaymentsreflectsa“savings”tosocietyofanestimated$2,720,454(thedifferencebetweenthetotalestimatedprivatecostandtheestimatedamountpaidbycohortmembers),or$1,875percohortmember.This“savings”tosocietycame,however,atthepublicfiscalcostofanestimated$3.6milliontotaxpayers,or$2,491percohortmember.MarginalexcesstaxburdenThereisacostinvolvedinraisingtaxestopayforthepubliclyfundedservicestoyouthexperiencingorat-riskofhomelessness.Economistsdescribethiscostasthemarginalexcesstaxburdenanditmagnifiesthepubliccostofallsuchservices.WefollowBelfieldandcolleagues,whociteeconomicsourcesthatplacethisburdenconservativelyat13percent.34Thismeansthatthefullcostofgetting$1oftaxrevenuetospendonwelfaretransferpayments,forexample,isactually$1.13.Wethereforeapplythisvaluetoeachoftheitemsofgovernmentspending.ThedistortionimposedbycollectingtaxesforpublicprogramsthatservetheYouthLink
34Belfield,p.15;AllgoodS,SnowA.1998.Themarginalcostofraisingtaxrevenueandredistributingincome.JPoliticalEconomy.1998(106):1246-1273.
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
46
2011cohortaloneis$1,423permemberoftheYouthLink2011cohortandover$2millioninaggregate.TheannualeconomicburdenTheestimatedannualeconomicburdenoftheYouthLink2011cohort,whattheycosttaxpayersandsocietyjustin2011,issummarizedinTable12.Table12:AnnualfiscalandsocialcostsofYouthLink2011cohort,perpersonandasacohort.
Cohortcosts Perpersoncosts
Excessfiscal Excesssocial Excessfiscal Excess
social Lostearnings
$7,299,968
$5,031
Losttaxpayments $1,762,920
$1,215 Crime:public
expenditures $11,725,212 $11,725,212 $8,081 $8,081 Crime:victimcosts
$7,504,080
$5,172
Health:publicexpenditures $1,151,786 $1,151,786 $794 $794 Welfare:supportprograms $623,930 $623,930 $430 $430 Welfare:transferpayments $6,345,760
$4,374
Education:publiccosts ($330,791) ($330,791) ($233) ($233) Education:privatefeesavings
($386,351)
($266) Marginalexcesstaxburden
$2,182,171
$1,504 Housing:publicsupport $3,615,793 ($2,720,454) $2,491 ($1,875) Total $24,894,610 $27,049,551 $17,152 $18,638
Source:Authors’analyses.AsshowninTable12,theannualfiscalcostoftheaverageYouthLinkclientwasmorethan$17,000,andthesocialcostwasnearly$19,000.Whenconsideredoverthe1,451membersofthecohort,thefiscalcostwasnearly$25million,andthesocialcostwasapproximately$27million.Itisimportanttounderstandthatthese
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
47
areannualamounts,andthesecostsrecureachyearbecauseeachyearthereareasimilarnumberofYouthLinkclientsinthisagegroup,andeachclientcanremaininthisgroupforuptonineyears,althoughfewremainconnectedtoYouthLinkforthatlong.Themaindriverofcosttotaxpayersisspendingonthecriminaljusticesystem,althoughwelfaretransferpaymentsarealsoalargeamount.Losttaxpaymentsarerelativelymodestbecausemostofthecomparisonpopulationyouthareinschool,incollege,orintheirinitialworkingyearsandsopayinglittleintaxes.Publicsupportforhousingcontributed14.5percentofexcessfiscalcosts.Thesocialcostisalsodrivenbythecostofcrime,includingvictimcosts,althoughlostearningsisalargepartofthesocialcost.
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
48
7. Immediate,long-termandtotallifetimeeconomicburdenResearchtothispointhasfocusedonestimatingtheannualcostofassistingthe1,451membersoftheYouthLink2011cohort.Inthissection,wetransformtheannualcostsintocostsovertimeinordertoestimatethelifetimeburdenoftheYouthLink2011cohort.Wedothisintwosteps,whatwecalltheshort-termandlong-termeconomicburden.Weestimatetheshort-termeconomicburden,whatwecallthe“immediatecostburden,”bycalculatingthepresentvalueofthestreamoffiveyearsofannualcostsusingadiscountrateof3.5percent.Wecalculatethestreamofcostsforfiveyearsbecausethatistheaverageamountthatanycurrent,specificyouthwilllikelybeacohortmember.Theannualburdenisforoneyear,butonlythe24-yearoldsimposeoneyearofburden.Incontrast,16-yearoldyouthexperiencinghomelessnesswillimposethisannualburdeneachyearuntiltheyreach24.Therefore,theaverageyouthwillimposetheburdenforfiveyears.(Anapproximateinterpretationisthattheindividualburdensarecalculatedforayouthexperiencinghomelessnesswhois20yearsold).BasedontheestimatedannualtotalsinTable12,theimmediatefiscalandsocial5-yearexcesscostspermemberoftheYouthLink2011cohortare$77,442and$84,152,respectively,andtheexcess5-yearfiscalandsocialcostsfortheentirecohortare$112,400,468and$122,130,139,respectively.TheseamountsrepresenttheeconomicburdenoftheYouthLink2011cohortoverthe16-24agerange.Lifeafterage24willbedifficultforthoseunabletotransitionfromdependenceonthetypesofgovernmentsupportsdescribedinthisreport.AsBelfieldandcolleaguespointout,inthelongrun,afterage24,
…theconsequencesoffailuretoinvestinhumancapitalorlabormarketskillsplayoutoverthelifecourse.Bothareimportant:ayouthwhoisincarceratedatage20imposesanimmediateeconomicburdenintermsofthecriminaljusticesystemandcorrectionsexpenditures,butthelongrunloss—intermsofjeopardizedeconomicwell-beingaswellasfutureincarcerationcosts—maybeevenlarger.35
35Belfield,p.11.
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
49
Directlyestimatingthelong-term(ages25-64)costsofdisconnectionischallengingandwasbeyondthescopeofoureffortfocusingontheYouthLink2011cohort.Acomprehensiveperspectiveontheeconomicburdenofyouthexperiencingoratriskofhomelessness,however,requiresincludinganestimateoftheselong-termcosts.OnereasonwecloselyfollowedBelfieldandcolleagues’approachtoestimatetheannualandimmediatecostsoftheYouthLinkcohortwastobeabletoapplytheirlong-termcostestimate.Anotherreasonwasthatevenifithadbeeninthescope,someofthedatasetsthatBelfieldandcolleaguesusedtoestimatethelong-termcostsarenotavailableinmorelocalizedform.OurjustificationforusingBelfieldandcolleagues’estimateofperpersonlong-termexcesscostshingesonthesubstantialsimilarityoftheYouthLink2011cohorttothe“opportunityyouth”theydescribe.Wehavealreadydiscussed,above,thedisconnection—orminimalconnection—oftheYouthLinkcohortfrombotheducationandemploymentduringages16-24,thetwodefiningcharacteristicsof“opportunityyouth.”Althoughnotidentical,thesimilaritiesarestriking.ThehighschoolgraduationrateofYouthLink2011cohortmemberwhowereage18orolder,forexample,wasapproximatelyhalfoftherateinHennepinCounty,evenlowerthantherateof“opportunityyouth.”AlthoughasmanyYouthLinkcohortmemberswereemployedasyouthinthegeneralpopulation,theyworkedfarfewerhoursandwerepaidlowerwages.Evenmorethan“opportunityyouth,”membersoftheYouthLink2011cohortwereoverwhelminglyyouthofcolor.Inshort,thekeycharacteristicsoftheYouthLinkcohortpointtothembeingmembersofthelargergroupthatBelfieldandcolleaguesdescribeas“opportunityyouth,”exceptthattheyarealsomorelikelytobeexperiencingoratriskofbecominghomeless.Belfieldandcolleaguesestimatethatforages25-64,thelong-termexcessfiscalburdenper“opportunityyouth”is$170,740andtheexcesssocialburdenis$529,030.36Theymadeseparateestimatesofthelifetimecostsforeachofthecomponentstheyexaminedfor“opportunityyouth”andusedadiscountrateof3.5percent.37,38Theyusethreedifferenttypesofdatatoestimatethislifetimeburden.Theseincludesomeannualinformationon“opportunityyouth”betweentheagesof25to28andhealthcarecostinformationuntilage31.Theythenverifytheirestimatesbycomparingdataonhighschooldropoutsandhighschoolgraduates,andbyextrapolatingearningsdifferencesbetween“opportunityyouth”andaverageyouthinthegeneralpopulation.Theseestimatesmaybeconservativeformembers36Belfield,p.22.37Belfielddoesnotprovideaseparateestimateforhousingcostsbecausemanyopportunityyoutharenothomelessoratriskofbecominghomeless.38Intheirlong-termindividualcostestimate,Belfieldandcolleaguesincludeasocialcostof$39,270forproductivityspillovers,acategorynotincludedintheyouthanalysis.Productivityspilloverscomefromtheworkforceworkingtogether,helpingtotraineachother,andraisingtheoverallproductivityoftheworkforce.Theyciteestimatesofthevalueofproductivityspilloverasbeingbetween10and37percentofearnings(seeBelfield,p.19).Theyestimatethedifferenceinlifetimeearningsbetweenhighschoolgraduatesanddropoutsas$392,710anduse10percentofthatamount,$39,270,asthelifetimeestimateoflostproductivityspillovers.
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
50
oftheYouthLinkcohortbecauseBelfielddidnotincludecostsforhousinginthebroadercategoryof“opportunityyouth.”ApplyingBelfieldandcolleagues’long-termindividualestimatesof$170,740and$529,030,forthefiscalandsocialcosts,respectively,tothe1,451membersoftheYouthLink2011cohort,yieldsexcessfiscalandsocialcostsfortheentirecohortof$247,743,740and$767,622,530,respectively.ThesecostsaresummarizedinTable13below.Thecostshavebeencomputedinawaythatmakesitpossibletoaddtheimmediate(5-year)coststothelong-termcosts,whicharealsoshowninthetable.Allcostshavebeencomputedusinga3.5percentdiscountrate.Table13:Presentvalueoftheestimatedimmediate(5-year),long-termandlifetimefiscalandsocialcostsofthe2011YouthLinkcohort.
Source:Immediateburdenistheauthors’estimate,ages25-64estimateisbasedonBelfieldtable5,p22,adjustedforcohortsize.AsshowninTable13,addingtheimmediateandlong-termestimatedcosts,ourestimatesofthelifetimefiscalandsocialburdensoftheYouthLink2011cohortareapproximately$248,182and$613,182perperson,respectively,and$360,144,208and$889,752,669forthecohort,respectively.
Percohortmember 2011YouthLinkCohort Fiscalcost Socialcost Fiscalcost Socialcost Immediate(5-year)total $77,442 $84,152 $112,400,468 $122,130,139
Long-term(ages25-64)
$170,740
$529,030
$247,743,740
$767,622,530
Totallifetimecost $248,182 $613,182 $360,144,208 $889,752,669
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
51
8. Break-evenanalysis
Untilnow,wehaveestimatedtheeconomiccostsofyouthexperiencinghomelessnessassumingthateveryonewhoexperiencesyouthhomelessnesswilllikelyspendtherestoftheirlivesdependentonsomepublicsupport.ThisassumptionissupportedbyBelfieldandcolleagues’data,discussedabove.Butsomeyouth,fortunately,areabletoovercometheconsequencesoftheirhomelessyouthandbecomeself-sufficient,throughtheirowneffortsorwiththeassistanceofinterventionsdesignedtohelpthemovercometheirpresentcircumstances.Thissectionofthereportexaminesthecoststosocietyavoidedbythosewhodo.Thebreak-evenanalysisaddressesthequestionofhowmanyYouthLinkclientswouldneedtochangethetrajectoryoftheirlivesinordertooffsetafullyear’sfiscalcostoftheinterventionsdesignedtohelpthembecomefinanciallyself-sufficientadults.WehavealreadyestablishedthattheestimateddiscountedfiscalburdenofeachYouthLinkclientbetweentheagesof16and64is$248,182.Forthepurposeofthisbreak-evenanalysis,weassumethatchangeoccursatage20.Theestimatednetpresentvalueofpotentialcostsavoidedoneachyouthisthen$211,059.WecalculatedtheexpendituresontheYouthLink2011cohortinordertocompletethebreak-evenanalysis.Table14describestheseexpenditures,dividedintothreebroadareas:39
• BasicNeeds:Thesearearangeofexpendituresintendedtomeettheday-to-dayneedsofyouthexperiencingoratriskofhomelessness,suchaswelfaretransferpayments,healthcareservicesotherthanformentalhealthandchemicaldependencytreatment,temporaryshelterandYouthLinkdrop-inservices.
• Housing:Thiscategoryincludescostsincurredtohouseyouthexperiencing
homelessness,withthegoalofestablishinghousingstability.Examplesincludefiscalexpendituresonsupportivehousing,youthshelters,EmergencyAssistance,theYouthMobileTeamandYouthLinkservicesrelatedtohousing.
39Costsincurredbythe2011YouthLinkcohortinthecriminaljusticesystem,whilesubstantial,arenotincludedasaninterventionbecausethecriminaljusticesystemisnotdesignedtosupporthomelessyouththroughmeetingtheirbasicneeds,providinghousing,ortomakethemlessdependentongovernmentsupports.
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
52
• TransformativeServices:Theseexpendituresaredesignedtohelpyouthchangetheirlivesthroughmentalhealthandchemicaldependencytreatment,education,welfaresupportprogramssuchasjobskillstraining,andcasemanagementbyYouthLinkandotherstaff.40
Table14:Expendituresforbasicneeds,housingandtransformativeservices,2011.
Basicneeds Housing Transformative
Healthcare $2,641,428
$1,796,873 Welfare $6,345,760
$623,930
Shelterandhousing $225,529 $1,697,380 $454,141 Fostercare $21,736 $169,663 $137,322 Education
$697,242
YouthLinkservices $1,080,368 $1,726,519 $723,711 HennepinCountyadministration $206,173 $19,566 $40,573 Total $10,520,994 $3,613,128 $4,473,792
Sources:HennepinCounty,YouthLink,MinneapolisPublicSchools,MCTC,authors’estimates.Asindicated,anestimated$18,607,914wasspentin2011tosupporttheYouthLink2011cohort.41Ofthisamount,$8,086,921,or43.5percent,wasspentonhousingandtransformativeservices.Basedontheseestimates,Chart8indicatesthenumberofyouthwhoseliveswouldneedtobechangedtobecomeself-sufficient,productiveadultsinordertooffsetthecostoftheinterventions.
40Weallocatedthecostoffostercareintothesecategoriesbasedonestimatedexpensesforbasicneeds,housingandtransformativeservices.41Weexcludedsometypesofcostswhenestimatingtheinterventioncostsbecause,whilereal,thesecostsdonotcontributetomaintainingorimprovingthelivesoftheseyouth.Theexcludedcostsincludefiscalexpendituresforlosttaxpayments,publicexpendituresoncriminaljusticeand“savings”oneducation.
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
53
Chart8:PotentiallifetimefiscalsavingsfromdifferentnumberofYouthLink’s2011cohortbecomingself-sufficientatage20.
Source:Authors’calculations.AsshowninChart8,allannualinterventioncostsforoneyearfortheentirecohortcanbeoffsetif89youth(6.1percentofthecohort)weretobecomeself-sufficient,productiveadults,beginningatage20.Only39transformedyouth(2.7percentofthecohort)arerequiredtocoverthefullyear’scostsofthehousingandtransformativeservicesfortheentirecohort,countingonlytheexpendituresdesignedtohelpyouthchangetheirlives.Thisestimateofthenumberofself-sufficientyouthneededtooffsetafullyear’scostofinterventionprogramsforallmembersofthecohortrepresentsthenetpresentvalueoftheavoidedcoststhattaxpayersshouldotherwiseanticipatespendingoverthenextfour-and-a-halfdecadesoftheirlives.Ofcourse,peopleseldomchangeasdramaticallyasassumedinthisexercise,butthisanalysissuggeststhepotentialvalueoftransformativeinterventionstotaxpayersiftheinterventionscansuccessfullyalterthelifetrajectoryatthisrelativelyearlypointintheirlivesofonlyasmallnumberofyouthexperiencingoratriskofhomelessness.Shouldtheinterventionssucceedinhelpingmoreyouth,thecostsavoidedbytaxpayerswouldbesubstantial.Forinstance,ifjustoneinfiveclientsofYouthLinkweretobecomeself-sufficient,productiveadults,thenetpresentvalueofavoidedcoststotaxpayersovertheirlifetimeswouldbeworthanestimated$61.2million,exceedingthecostoffundingtotalannualinterventionandsupporteffortsforallby$42million.Thesesavingscanpotentiallymultiply,aseachyearbringsanewcohortofyouthwhoexperienceorareatriskofbecominghomeless.
$0
$50
$100
$150
$200
$250
$300
$3501 51
101
151
201
251
301
351
401
451
501
551
601
651
701
751
801
851
901
951
1001
1051
1101
1151
1201
1251
1301
1351
1401
1451
PotentialSavingsMillions
NumberofYouthin2011Cohort
BreakevenAnalysis:Proportionof2011CohortthatWouldNeedtoBecomeSelf-SufPicienttoCoverOneYear'sCostofServices
22(1.5%)self-sufkicientyouthcoverannualcostofalltransformativeservices39(2.7%)self-sufkicientyouthcoverannualcostofalltransformativeandhousingservices
89(6.1%)self-sufkicientyouthcoverannualcostofalltransformative,housingandbasicservices 290(20%)self-sufkicient
youthwouldgenerate$42millionsavingstotaxpayers,abovetheannualcostofallservices
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
54
9.ConclusionsandpolicyimplicationsAsBelfieldandcolleaguesnoted,“Theeconomicconsequencesofopportunityyouthareenormous.”42ThecohortofyouthexperiencingoratriskofbecominghomelesswhowereclientsatYouthLinkduring2011representsasubstantialburdentotaxpayersandsociety.Taxpayersfaceanestimatedlumpsumcostof$248,182(2011dollars)peryouth.Thenetpresentvalueofthefulllifetimefiscalburdenofthe1,451youthconsideredinthisanalysisisanestimated$360,144,208.Thecoststosocietyareevenhigher.Fromasocialperspective,theestimatedlumpsumcostperyouthis$613,182,andthenetpresentvalueofthefulllifetimesocialburdenisanestimated$889,752,669.Theseexcesscostsrepresentacombinationoflostopportunitiesbytheseyouth,suchasreducedearnedincomeandlowerpaidtaxes,andexcessexpensesincurredontheirbehalf,suchaswelfaretransferpayments,publicexpendituresforhousingandoperationofthecriminaljusticesystem.Estimatinglifetimecostsinvolvesmanyassumptions,andwereliedonBelfieldandcolleagues’estimateofthelong-termcostsof“opportunityyouth”whencalculatingthelifetimeeconomicburdenoftheYouthLink2011cohort.Wewereable,however,toestimatetheimmediate(5-year)costsofthiscohortmoredirectly,usingdata(withoneexception)specifictothemembersofthiscohort.Theestimatednetpresentvalueoftheimmediate(5-year)economicburdentotaxpayerspercohortmemberis$77,442,andtheestimatedtaxpayerburdenoftheentirecohortis$112,400,468.Thesameestimatesforthesocialburdenare$84,152percohortmember,and$122,130,139forthefullcohort.Aswehaveseen,HennepinCountyandothergovernmentalandprivateentitiesexpendsubstantialresourcestoaddresstheproblemsofyouthexperiencingandatriskofbecominghomeless.Mostoftheseexpendituresareintendedtomeettheday-to-dayneedsoftheseyouth,forneedsrangingfrommealstonightlyshelterandhealthcare.Substantialadditionalexpendituresaremadetohousetheseyouth,withthegoalofhelpingthemachievehousingstability.Otherexpendituresaimtohelpthemtransformthetrajectoryoftheirlives,byaddressingtheirpsychosocialproblems,furtheringtheireducationsandteachingthemjobskills.Therearemanycausesthatleadyouthtoexperiencehomelessness,andmultipleobstaclesthatmustbeaddressedbyprogramswhosegoalistohelpsuchyouthtoaltertheirlives.Successisnotassured,andsomeyouthmaynotbeabletorespond
42Belfield,p26.
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
55
tothebestprograms.Thebreak-evenanalysisdemonstrates,however,thatthelifetimeeconomicburdenofyouthexperiencingoratriskofbecominghomelessissogreatthatsuccesswithonly2.7percentoftheseyouthisneededinordertooffsetthecostofallofthehousingandtransformativeprogramsthatwereprovidedin2011.Thebreak-evenanalysisthussuggestsanopportunityfortaxpayersandsociety.Totheextentthatprogramsaimedattheseyouthcanhelpchangethedirectionoftheirlives,theseprogramsrepresentaninvestmentintheir—andour—future.Foreachyouthexperiencingoratriskofhomelessnesswhobecomesaproductiveandtax-payingcitizensavesanestimated$211,059inlifetimefiscalcosts.However,thisstudyshowsthatalthoughthepayoffforhelpingyouthtransformtheirlivesisenormousintermsoftaxpayersavings,theperiodforearningthesavingsislong.Nevertheless,consideringonlytheeconomicimplications,andleavingasidethehumanconsiderations,thisbecomesaninvestmentopportunityweforegoatourownperil.
Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.
56
AbouttheauthorsStevenS.Foldes,Ph.D.,isasocialscientistwithmorethan30yearsofexperienceconductingpublichealthandhealthservicesresearchandleadingresearchteams.Dr.FoldesreceivedhisdoctoratefromtheUniversityofChicagoandwasaBushFoundationLeadershipFellow.Followingacareerinappliedresearchthatspannedstategovernment,healthplansandprivateindustry,in2011hestartedFoldesConsulting,LLC,anindependentconsultingpractice,andwasappointedanAdjunctAssociateProfessorofEpidemiologyandCommunityHealthattheUniversityofMinnesota.OverthecourseofhiscareerDr.Foldespublishedmanypeer-reviewedarticlesandbookchapters.Hisworkhasbeenwidelycitedinthescientificliteratureandhasbeencreditedwithinfluencingpublicpolicy.HewashonoredwiththefirstnationalBlueCrossandBlueShieldAssociation“BestofBlue”awardforhealthservicesresearch.AndreaLubovreceivedherPh.D.ineconomicsfromWashingtonStateUniversity.Asaconsultant,herprimaryfocushasbeentaxpolicyandlocaleconomicdevelopment.Shealsospentseveralyearsasamunicipalbondunderwriterandistheauthorofthreeeditionsofaworkbooktoaccompanyacollegeeconomicsstatisticstextbook.ShewasanactivememberofanddideconomicresearchfortheStopsforUscoalition,agroupofcitizenorganizationsthatwasabletogetthreekeystopsincludedinthelightraillineconnectingdowntownMinneapolisandSt.Paul.Inaddition,sheisanactiveamateurmusicianandplaysthebassoonintheoldestcommunityorchestrainMinnesota.