Author: | Greenberg, D.H. Robins, P.K. |
Title: | Incorporating nonmarket time into benefit–cost analyses of social programs: an application to the self-sufficiency project |
Journal: | Journal of Public Economics
2008 : APR, VOL. 92:3-4, p. 766-794 |
Index terms: | cost benefit analysis evaluation incentives projects labour supply Canada |
Language: | eng |
Abstract: | For the evaluation of social programs, benefit-cost (hereafter as: b-c.) analysis is extensively used. Often, these programs' success or failure is judged on the basis of whether the calculated net benefits to society are positive or negative. This paper develops a methodology for incorporating lost non-market (herein as: n-m.) time into b-c. analyses of social programs. This methodology is applied to the Self-Sufficiency Project (SSP), an experimental welfare-to-work program tested on a pilot basis in two Canadian provinces during the 1990s. It is found that if losses in n-m. time are ignored, SSP yields a substantial positive net benefit to society. However, if losses in n-m. time are taken into account, the net societal benefits are greatly reduced, even becoming negative in certain instances. It is concluded that future b-c. analyses of social programs have to take effects on n-m. time into account to give a more accurate picture of the net benefits of the program. |
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