Civilian Conservation Corps (CCC)

The authors present seven main components of net program costs (all final values noted in 2017 dollars).

(1) Upfront cost of the program (wages, food, lodging, and training). The authors obtain an estimate this cost from Levine 2010, who estimated the annual cost per enrollee to be $1,004 in 1939. Adjusting for inflation and considering that the average enrollee in their sample spends 0.8 years in the program, the average cost per enrollee is $14,384.81.

(2) A negative fiscal externality due to increased Social Security transfers, given that the program increases life expectancy and pension payments. The authors compute the additional survival rate caused by program participation for each year after age 65, assumed to be the age of retirement. Using the finding that enrollees receive on average an extra $14 in pension payments per month, the authors compute a net present value of total extra pension expenditures due to program participation of $2,514.17.

(3) A positive fiscal externality from the higher amount of taxes paid from participants’ increased earnings. The authors first estimate the extra earnings due to program participation from observed increases in pension contributions. It then assumes a 33.6% average tax rate, based on the CBO tax simulator, and computes the taxes paid on extra earnings due to program participation to be $6,965.46.

(4) A positive fiscal externality from decrease in social security disability (SSDI) payout due to decrease in claiming rate. The authors estimate a baseline value of SSDI claiming using the average SSDI amount (1,171.80) at the average claiming age (50), and the average claiming rate in their sample (0.21). They compute the net present value of lifetime payout, then compare with value with the change in SSDI amounts by accounting for the decrease in SSDI claiming rate, yielding a value of $910.61.

(5) A positive fiscal externality from decrease in social security payout from increase in retirement age. The authors use their average enrollee’s increase in claiming age (0.33) and assume that this increase affects the retirement decision with probability (1-0.21). They multiply 0.33 * (1-0.21) by the average amount an enrollee would receive at age 65, yielding $732.51.

(6) A positive fiscal externality from decrease in SSDI payout due to increase in claiming age. The authors use their average enrollee’s increase in claiming age (0.33) and assume that this increase affects the retirement decision with probability 0.21 (the average rate of disability claiming in their sample). They multiply 0.33 * 0.21 by the average amount an enrollee would receive at age 51, yielding $72.61.

(7) A positive fiscal externality from goods produced during the program (primarily conservations work. The authors do not estimate the total value of the conservation work and note that their net cost should then be considered an upper bound.

Adding the first six components yields a net cost of $8,217.78.

Combining the WTP and net cost, the MVPF is then $49,578.56/$8,217.78 = 6.03. The authors note that, if they exclude the WTP for the increase in longevity from the numerator, the MVPF is 2.52.