8/26/2011 - Research Presents Findings on Cost-Benefit Analysis of Capital IDEA

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Tara C. Smith and Dr. Christopher T. King from the Ray Marshall Center recently published the report, Exploratory Return-on-Investment Analysis of Local Workforce Investments. The report provides a cost-benefit evaluation of Travis County's long-term workforce development through Capital IDEA, a nonprofit workforce intermediary based in Austin, Texas. Capital IDEA provides occupational skills training and extensive support services to low‐income residents. Training and job placement are sectorally targeted at high-demand occupations such as health care, information and electronic technologies, utilities, and skilled trades. The report presents the returns from participation in Capital IDEA from three perspectives: participants, taxpayers, and society. Findings from the research show that:
  • Participation in Capital IDEA is associated with large, statistically significant gains in quarterly employment, eligibility for Unemployment Insurance benefits, and average quarterly earnings as indicated in the chart to the right.
  • Over the first 10 years, each dollar invested in Capital IDEA training returns $1.65 to taxpayers, which translates to an annual return rate
    of 9% per year.
  • Taxpayer investments are fully recouped after 8.5 years. Total returns to taxpayers are estimated at 165% for the first 10 years and 501% over 20 years.
  • Over 20 years, each dollar invested in Capital IDEA returns $5.01 to taxpayers—an annual return rate of 17% per year.
Ray Marshall Center

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