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learn$ave Project: Final ReportTable 8.2learn$ave Present Value Cost-Effectiveness, by ProgramGroup, All Program Group Participantslearn$aveonlylearn$aveplusImpact on enrolment in education5.5 7.5and training overall (%) 1Cost per Additional PersonReceiving Education andTraining ($)70,168 54,966Impact on enrolment in an education7.8 10.8program (%) 1Cost per Additional PersonEnrolled in an EducationProgram ($)Source:Note:48,902 37,952Calculations based on learn$ave site staff time studies, ProgramManagement Information System, accounting records,baseline survey, and three follow-up surveys.1Enrolment estimates differ somewhat from those presentedin Chapter 7, as the latter were based on only educationstream participants.discussion of how the costs vary by saving stream, seeBox 8.3.To properly evaluate the cost-effectiveness of learn$ave,a reference or benchmark is needed. As with the abovecomparisons of cost-economy and cost-efficiency, oneway to do this is to compare learn$ave’s cost-effectivenessto other programs with similar purposes. Regrettably,insufficient information was available to enable this comparison.While a cost-efficiency comparison was madewith the Employment Insurance Part II employmentand skills training measures, the available data did notpermit us to calculate a true estimate of cost-effectivenessfor this comparison program. Indeed, estimates of true(incremental) impact of any existing programs are rarelygenerated.Another comparison method is to examine the increasein average participant annual earnings needed to coverthe financial cost of encouraging them (including theparticipants identified as having a windfall benefit) toenter into education. 15 This is not a traditional way ofassessing cost-effectiveness but it at least provides abasic benchmark (breakeven point) to place learn$aveIDA program costs into context. Since a typical learn$aveparticipant was about 33 years old at the time ofenrolment in the project (see Chapter 3), the averageparticipant would have 32 more earning years if retirementage is assumed to be 65. Using an annual discount15 Even when the annual increase in earnings can cover the financial cost, however,cost-effectiveness does not imply there is a net social benefit. There are other costs besidefinancial ones, including the opportunity cost of lost earnings while in school. However, if thepotential annual additional increase in earnings resulting from the intervention is lower thanthe financial cost, it would be more cost-effective to simply transfer an equivalent amount ofmoney from the government to the participants since the program is not likely to be viable.See Table G in Appendix G for more on this.Box 8.3Differences in costs by saving streamIn addition to considering differences in the costs for the two differentprogram groups and for two different types of education activity(programs and courses), the study of the learn$ave costs also examinedwhether there were differences in costs between the education andmicro-enterprise streams. Micro-enterprise stream participants wereallowed to use their earned matched credits on small business start-upand/or education and training, while education stream participantshad to use them for education or training only. Not unexpectedly, theeducation participation rate as well as learn$ave’s impacts on educationwere lower among the micro-enterprise stream.Based on the results in Table 8.3, we conclude that the cost-efficiencyof learn$ave was marginally better for the education streamthan for the micro-enterprise stream. Specifically, the costs peractive-saving-participant, per participant-dollar-saved, and per participantreceiving-education(rows 2 through 4) were somewhat lower for theeducation stream than for the micro-enterprise stream.Moreover, the results would suggest that learn$ave could be morecost-effective in encouraging self-employment among micro-enterprisestream members than encouraging education among education streammembers. As indicated in Chapter 7, learn$ave increased the incidenceof self-employment by about 25 percentage points and 15 percentagepoints for the learn$ave-only and learn$ave-plus groups, respectively.This means that the costs for each new participant who entered intoself-employment were $14,901 for learn$ave-only (per participant costsof $3,658.14 / 0.25) and $27,166 for learn$ave-plus ($3,968.91/ 0.146). This means that, to cover the financial cost of encouragingparticipants to enter self-employment, learn$ave-only group membersinduced into self-employment would have to earn less than educationstream members induced into education or training, i.e., they would haveto earn only $943 more a year for 32 years from their self-employmentjob in increased earnings, while learn$ave-plus participants would haveto earn almost twice that: $1,719 per year.rate of 5 per cent for a 32-year period, learn$ave participantswould have to earn an additional $4,440 annuallyfor learn$ave-only participants and $3,478 annually forlearn$ave-plus participants to cover the financial costsof learn$ave. These are substantial amounts and wouldmean large annual increases over participants’ baselineaverage annual income of $11,000. For those participantswho invested their learn$ave dollars in education ortraining courses, previous research suggests the returnswill be small and unlikely to meet this threshold test. Asa result, we conclude that learn$ave is not likely to be a98 | Chapter 8 Social Research and Demonstration Corporation