Today, Opportunity Insights released A Unified Welfare Analysis of Government Policies examining 133 historical policy changes in the U.S. over the past half-century. These policies span social insurance (e.g. health and disability insurance), education and job training (e.g. preschool spending and college subsidies), taxes and cash transfers (e.g. top tax rate changes or expansions of the earned income tax credit), and in-kind transfers (e.g. housing vouchers and food stamps.)
The research calculates the benefits that each policy provides its recipients (measured as their “willingness to pay”) and the policy’s net cost to the government. The ratio of these two estimates makes up a policy’s Marginal Value of Public Funds or its “MVPF.”
The analysis has yielded the following conclusions:
- Direct investments in the health and education of low-income children have historically yielded the highest returns
- Opportunities for high-return investments have persisted throughout childhood.
- Many direct investments in low-income children’s health and education have paid for themselves.
- MVPFs were lower for policies targeting adults
Despite the general patterns presented here, we do find several exceptions to these patterns, such as low returns to historical job training programs and high returns with policies targeting adults that have spillover effects onto children.
Explore policies for yourselves using our interactive online tool at www.policyinsights.org.
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