Social Cost-Benefit Asymmetry in Youth Crime Prevention

In Simple Words

Think of buying high-tech security guards for two different buildings: placing them in a bank prevents multi-million dollar robberies and pays for itself immediately, whereas placing them in an empty park saves virtually no money because no valuable crimes were going to happen there anyway.

Research question

Public employment programs carry substantial implementation costs ($1,403 per participant), making economic justification reliant on calculating monetized social externalities like averted crime. General population deployment yields negligible financial crime-reduction returns.

Participants

N = 163,447 program applicants evaluated against offense-weighted social cost metrics ($19,000 bottom-up to $37,000 willingness-to-pay per arrest), New York City.

Study Design

Monetized external cost calculation applying Cohen & Piquero (2009) crime valuation models to 2SLS treatment effect estimates.

Results

Preventing 34 arrests per 1,000 at-risk youth yields $652 to $1,250 in crime reduction savings per participant, directly offsetting 46.5% to 89.4% of total program cost ($1,403) during the summer alone. For low-risk youth, social savings from averted crime total only $2 to $3 per participant.

Takeaway

1. Incorporate subgroup-specific crime cost valuations into government cost-benefit models to justify targeted social program investments.

Related findings

• Public Cost-Benefit Valuation of Policy Regimes →Policy & public sector

  Evaluating a company's safety equipment requires weighing the upfront purchase cost against prevented accident expenses and increased worker productivity, calculating the net money saved across the entire organization.

• Fiscal Return on Active Labor Market Policies →Policy & public sector

  Think of investing in a software tool that costs $50 to speed up an employee's work so well that it saves $60 in payroll costs, compared to paying an outside contractor $300 for the same task without saving any payroll time at all.

• Six-to-One Social Benefit-to-Cost Efficiency in Youth Employment →Policy & public sector

  Subsidizing temporary summer jobs functions like buying a low-cost security lock that prevents thousands of dollars in emergency hospital visits and property damage down the road. By spending a modest amount upfront per youth, cities save vastly larger sums in avoided criminal justice processing, victim injuries, and long-term incarceration.

• Administrative Exclusion of Inactive Work Scheme Beneficiaries →Policy & public sector

  This is like upgrading a school communications portal but sending setup instructions only to students currently sitting in class today. Former students who stepped away temporarily are left completely out of the loop and face steep hurdles attempting to re-enroll.