This report presents a cost-benefit analysis of three JDC-Israel-Tevet programs intended to integrate disadvantaged groups into the workforce: Eshet Chayil for Arab women, Mafteach for the ultra-Orthodox population and Strive for young adults with limited resources.
The major focus of the analysis is on the costs and benefits from the perspective of society (increase in the resources available to society), but it also includes an assessment from the perspectives of the government (net savings in the state budget) and the participants (improved financial status).
One basis for the analysis is the assessment of the impact of the programs on employment rates as measured by a comparison between the integration into employment of the participants and that of a similar group who did not participate. The data on the participants were taken from the programs’ information system; the data on the comparison group were from the CBS Labor Force surveys. Our analysis was also based on assumptions about factors that we could not accurately assess due to data limitations.
Among the main findings:
From the perspective of society, two years after the participants joined the programs, the average benefit per participant exceeded the cost. For Eshet Chayil, the net benefit (benefit less cost) was approximately NIS 7,400 per participant; for Mafteach, NIS 9,800 per participant; and for Strive NIS 6,700 per participant.
From the perspective of the participants, the benefit exceeded the cost, since the participants’ wages when they were working were higher than the costs involved in going to work.
From the state budget perspective, the cost (investment in the programs) was greater than the benefit (saving to the budget). This is because some of the participants who found work were eligible for an employment grant (“negative income tax”), and only a few of them earned enough to pay income tax.
The evaluation did not include elements whose financial value is difficult to assess, such as the impact of the programs on the family of the participants and the long-term impact of the programs after two years.
The study was initiated and funded by JDC-Tevet. The findings are helping Tevet to deepen its efforts to examine the effectiveness of its programs. in addition they contribute more generally to the economic assessment of employment programs in Israel.
Citing suggestion: Levy, N., & Deutsch, Z. (2016). Cost-Benefit Analysis of Innovative Programs to Integrate Groups with Low Rates of Employment. Myers-JDC-Brookdale Institute. (Hebrew)