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Return on Investment in Workforce Development Programs




Under more and more fiscal scrutiny because of shrinking state and local budgets, workforce development programs are being asked to estimate their return on investment (ROI). This paper introduces basic concepts of ROI in workforce development programs. It distinguishes ROIs estimated for workforce programs from those that are estimated for financial investments or capital projects. The paper furthermore exposits the basic ingredients of an ROI study—identification of the treatment and time periods of analysis, identification of the net impacts of the program, and identification of net costs. Finally, the paper presents results from the estimation of the ROI for postsecondary career and technical education in the State of Washington.

Suggested Citation

  • Kevin Hollenbeck, 2012. "Return on Investment in Workforce Development Programs," Upjohn Working Papers and Journal Articles 12-188, W.E. Upjohn Institute for Employment Research.
  • Handle: RePEc:upj:weupjo:12-188

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    References listed on IDEAS

    1. Kevin Hollenbeck, 2011. "Short-Term Net Impact Estimates and Rates of Return," Book chapters authored by Upjohn Institute researchers,in: The Workforce Investment Act: Implementation Experiences and Evaluation Findings, chapter 12, pages 347-370 W.E. Upjohn Institute for Employment Research.
    2. repec:mes:challe:v:26:y:1983:i:4:p:56-57 is not listed on IDEAS
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    More about this item


    Return on investment; present value; net present value; benefit cost analysis; workforce development; postsecondary CTE; Washington state; human capital;

    JEL classification:

    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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