The MVPF is a valuable tool because it serves as a unifying measure for policy analysis. In recent work, the Principal Investigators at Policy Impacts have used the MVPF to draw lessons from historical US policies.
We analyzed 133 historical policy changes in the U.S. over the past half century.
We analyze policies spanning 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.)
That research produced the following 5 lessons:
Not every policy targeting children has a high MVPF. Despite the general patterns presented here, some policies targeting children yield low MVPFs. For instance, we find low returns for youth job training programs and college subsidies when they don’t significantly increase attainment. We also find lower MVPFs for transfers to disabled children and their families. This reinforces the important reality that the MVPF alone does not determine which expenditures are desirable or undesirable. Rather, it measures the budgetary tradeoffs associated with different types of policies.