ment provides a process for raising the level of performance for those that stay above water.

COSTS AND BENEFITS OF JUVENILE JUSTICE INTERVENTIONS

Because there is compelling evidence that a variety of intervention programs for juvenile offenders significantly reduces one-year rearrest (by anywhere from about 6 to 40 percentage points), it remains to ask if it is really worth it from a broader social policy perspective to promote these types of programs. Even if a juvenile offender intervention program is effective, it is still necessary to ask a number of questions about the wisdom of widespread adoption. Is the program more valuable than other opportunities that could be pursued with the resources devoted to it? That is, does the value of its effects exceed the cost of producing them? Information relevant to these questions can be obtained using the technique of benefit-cost analysis.

The fundamental idea of benefit-cost analysis is straightforward. These approaches comprehensively identify and measure the benefits and costs of a program, including those that arise in the longer term, after youth leave it, as well as those occurring while they participate. If the benefits exceed the costs, the program improves economic efficiency in the sense that the value of the output (i.e., the program’s impacts) exceeds the cost of producing it. As a result, society is economically better off because certain measurable, positive outcomes have been achieved as the result of having the program in place, and the value of these outcomes is greater than the costs of putting the program into place. If costs exceed benefits, society would be economically better off not operating the program at all and devoting the scarce resources that would be used to run it to other programs with the same goal that do pass a benefit-cost test or to other worthwhile purposes.

Benefit-cost analysis may be viewed as a way to calculate society’s return from investing in an intervention. In a sense, it is the public-sector analog to private-sector decisions about where to invest resources. Benefit-cost analysis, however, considers benefits and costs for all members of society, not just those for one enterprise.

Our analysis covers benefit-cost analyses of programs explicitly designed to reduce juvenile crime.4 There are a number of analyses of program effects on a range of outcomes for children and youth, including schooling, earnings, teen pregnancy, and sometimes crime as well (Aos et al., 2004; Small et al., 2005; National Research Council and Institute of

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4 Appendix A provides a more extensive discussion of how benefit-cost analysis is applied to juvenile justice programs.



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