foldes consulting llc - youthlink mn: from … · foldes consulting llc ... , and an ongoing search...

Foldes Consulting LLC Understand populations. Intervene effectively. Demonstrate results.

TheEconomicBurdenofYouthExperiencingHomelessnessandtheFinancialCaseforInvestinginInterventionstoChangePeoples’Lives:AnEstimateoftheShort-andLong-TermCoststoTaxpayersandSocietyinHennepinCounty,MinnesotaAWhitePaperPreparedforYouthLink

StevenS.Foldes,Ph.D.andAndreaLubov,Ph.D.April6,2015


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


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.


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).


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


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.


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


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.


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


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.


10

ProfessorCliveBelfieldofQueensCollege,CUNYconsultedonmethodologicalquestionsandhelpedustoadapthisresearchapproachtoourlocalneeds.JodyRooneyprovidedmethodologicalassistanceearlyinthisproject.WeofferspecialrecognitionandappreciationtotheOttoBremerFoundationfortheinitialsupportneededtostartthisproject.In2010,undertheleadershipofExecutiveDirectorRandiRoth,theOttoBremerFoundationlaunchedintensiveresponsivegrantmakingaroundtheissueofyouthhomelessnessintheTwinCities.OnesignificantresultofthiseffortwastheincreasedcapacityofYouthLinktoserveyouthuptoage24.Additionally,thefoundationprovidedfundingtoinitiatethisbreak-evenanalysis.AdditionalfundingforthisprojectwasprovidedbytheHearstFoundationsandtheBlueCrossandBlueShieldofMinnesotaFoundation.WearegratefulfortheinterestandsupportofBCBSMNFoundationExecutiveDirectorCarolynLinkandProgramOfficerAllisonCorrado.Theauthorsaresolelyresponsibleforanyerrors.


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.


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.


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.


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.


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.


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.


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,


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.


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.


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.


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


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


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.


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


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


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.


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.


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.


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.


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


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.


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


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.


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/


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.


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.


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.


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,


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.


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.


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


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.


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


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.


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.


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


47

areannualamounts,andthesecostsrecureachyearbecauseeachyearthereareasimilarnumberofYouthLinkclientsinthisagegroup,andeachclientcanremaininthisgroupforuptonineyears,althoughfewremainconnectedtoYouthLinkforthatlong.Themaindriverofcosttotaxpayersisspendingonthecriminaljusticesystem,althoughwelfaretransferpaymentsarealsoalargeamount.Losttaxpaymentsarerelativelymodestbecausemostofthecomparisonpopulationyouthareinschool,incollege,orintheirinitialworkingyearsandsopayinglittleintaxes.Publicsupportforhousingcontributed14.5percentofexcessfiscalcosts.Thesocialcostisalsodrivenbythecostofcrime,includingvictimcosts,althoughlostearningsisalargepartofthesocialcost.


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.


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.


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


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.


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.


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


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.


55

tothebestprograms.Thebreak-evenanalysisdemonstrates,however,thatthelifetimeeconomicburdenofyouthexperiencingoratriskofbecominghomelessissogreatthatsuccesswithonly2.7percentoftheseyouthisneededinordertooffsetthecostofallofthehousingandtransformativeprogramsthatwereprovidedin2011.Thebreak-evenanalysisthussuggestsanopportunityfortaxpayersandsociety.Totheextentthatprogramsaimedattheseyouthcanhelpchangethedirectionoftheirlives,theseprogramsrepresentaninvestmentintheir—andour—future.Foreachyouthexperiencingoratriskofhomelessnesswhobecomesaproductiveandtax-payingcitizensavesanestimated$211,059inlifetimefiscalcosts.However,thisstudyshowsthatalthoughthepayoffforhelpingyouthtransformtheirlivesisenormousintermsoftaxpayersavings,theperiodforearningthesavingsislong.Nevertheless,consideringonlytheeconomicimplications,andleavingasidethehumanconsiderations,thisbecomesaninvestmentopportunityweforegoatourownperil.


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.

foldes consulting llc - youthlink mn: from … · foldes consulting llc ... , and an ongoing search...

Documents