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learn$ave Project: Final ReportThe time period for the cost estimates begins at themonth of project enrolment and ends on the date of thefinal participant follow-up survey interview at the 54thmonth. This period includes all 4 phases of the project:1) participant recruitment, enrolment and orientation;2) the three-year saving period during which matchedcredits were earned, 3) the cash-out period beginningas early as the 12th month in the project and extendingup to month 48; and 4) up to 6 months of post-learn$aveactivity including participation in education, employmentand self-employment. All cost figures used in this chapterare expressed in constant 2002 dollars, using a five percent annual social discount rate. Even though the federalTreasury Board Secretariat (1998) suggests that a highersocial discount rate be used in cost-effectiveness analyses,current capital cost conditions would suggest that a fiveper cent return on investment would be an appropriateassumption. Alternative estimates using various annualdiscount rates up to 12.5 per cent are shown in Table H inAppendix H.Administration and operating costs of learn$ave atthe experimental sites were measured using accountingrecords and program administrative data obtained fromthe SEDI and local site offices. To further break the costdown into detailed activities, data at three points in theproject were obtained from staff time-use studies conductedat the three experimental sites. SEDI also providedinformation on approximate cost breakdowns accordingto activity. The estimates of the effects of the learn$aveproject on savings and education enrolments are identicalto those presented in Chapters 5 through 7 of this report,apart from the fact that education impacts for this chapterwere computed for the education and micro-enterprisestreams combined to simplify calculations, whereas inChapter 7, impacts were presented for just the educationstream. These estimates were based on data collectedfrom the participant baseline and three follow-up surveys.The costs of time provided by the financial institutionpartners to set up and administer the learn$ave accountsand share information were imputed.In arriving at estimates of actual cost-effectiveness ofproducing learn$ave impacts, the approach employedwas to first generate estimates for intermediate costmeasures relating to inputs and outputs: the costeconomyof program activities and the cost-efficiency ofprogram outputs. Then, to scale or benchmark the results,learn$ave’s costs were compared with those of programsdirected at similarly disadvantaged target populations, tothe extent the date exist.It should be noted that the cost-effectiveness analysisof learn$ave differs from prior such analyses of IDAs (seeBox 8.2A note on terminologyThroughout this chapter we refer to certain concepts that, while widelyused in cost-effectiveness analysis, are prone to being misunderstood. Forthat reason, we provide readers with the following definitions of termsused in this study:Cost-economy: the average cost needed to complete a unit of programactivity or input. For example, the average cost to run a program perhour. Usually for an existing program, it is used to identify the cost areasfor improvement.Cost-efficiency: the average cost to produce a unit of direct programoutput. For example, the average cost to run a program per activeparticipant or for each dollar saved by a participant. A common elementof IDA projects is the accumulation of savings. Therefore, the cost perdollar saved in the learn$ave account is a unit by which its cost-efficiencycan be compared to other IDA projectsCost-effectiveness: the average cost to produce a unit of programoutcome or impact. For example, the average cost to run a programper participant who enrolled in education or who started a smallbusiness. Cost-effectiveness measures discount outcomes that wouldhave happened in the absence of the program (i.e., those of the controlgroup). The main outcomes of learn$ave are the incremental effects(impacts) on education enrolment and self-employment. The first unit ofcost-effectiveness measured is the cost of increasing education enrolmentby one participant. The cost-effectiveness of learn$ave in increasingeducation enrolment can be calculated by type or level of education (e.g.,college and university, courses and programs). A second unit of measureis the cost-effectiveness per self-employment job created.for example Schreiner, 2005) for three reasons. First,learn$ave participants were rewarded only for saving foradult learning or small business development, whereasother IDA programs used matched savings for a widerrange of goals such as home purchase or repair andretirement savings. In learn$ave, the main outcomes usedto evaluate cost-effectiveness are enrolment in educationacquired and self employment whereas other IDAprograms have examined the value of the real property orfinancial assets acquired through the program. That said,the evaluation of learn$ave is consistent with standardcost-effectiveness research on other publicly-fundedprograms. Second, a subgroup analysis was conducted tohelp to better target future IDA programs. Other studiestypically do not this.Thirdly and most importantly, this cost-effectivenessanalysis takes windfall gains into consideration, unlikemany such analyses. Although the cost of education and92 | Chapter 8 Social Research and Demonstration Corporation