Cost-Effectiveness in Individual Development Accounts

Because resources are limited, the benefits and costs of social-work interventions—like all interventions—must be compared with the benefits and costs of alternatives. Evidence-based practice should ask not only “What works?” but also “How well does it work?” and “What does it cost?” Unfortunately, evaluations of social-work practice—like evaluations in any field—rarely can measure all the relevant variables. In particular, benefits are extremely difficult to measure. Costs are simpler to measure, but even so, few evaluations measure costs. In the end, all evaluations are inevitably incomplete and so must make subjective judgments about unmeasured factors. The key to evaluation, then, is not certainty nor objectivity but rather explicitness. an evaluation’s usefulness rests not in its (apparent) incontrovertibility but rather in its clarity of assumptions, its explicitness about subjective judgments, and its openness to meaningful review and critique. With these goals in mind, this paper analyzes the provision of Individual Development Accounts with a new cost-effectiveness framework meant to help make assumptions and judgments explicit. In the specific IDA program examined, one month of services for one participant cost about $64. The mere existence of a cost figure—regardless of whether it is seen as high or low—has sparked many questions in the IDA community: How can costs be reduced without sacrificing quality? Which features of IDAs are essential? Are IDAs worth it? This sort of healthy questioning is precisely the purpose of cost-effectiveness analysis in social-work practice.

Subsequent publication: Schreiner, M., Ng, G. T., & Sherraden, M. (2006). Cost-effectiveness in Individual Development Accounts. Research on Social Work Practice, 16(1), 28–37. doi:10.1177/1049731505276077

Project: American Dream Policy Demonstration (ADD)