46 Chapter 3: Investment analysis Government savings In addition to the creation of higher tax revenues to the state and local government, education is statistically associated with a variety of lifestyle changes that generate social savings, also known as external or incidental benefits of education. These represent the avoided costs to the government that otherwise would have been drawn from public resources absent the education provided by SUNY WCC. Government savings appear in Figure 3.2 and Table 3.3 and break down into three main categories: 1) health savings, 2) crime savings, and 3) income assistance savings. Health savings include avoided medical costs that would have otherwise been covered by state and local government. Crime savings consist of avoided costs to the justice system (i.e., police protection, judicial and legal, and corrections). Income assistance benefits comprise avoided costs due to the reduced number of welfare and unemployment insurance claims. The model quantifies government savings by calculating the probability at each education level that individuals will have poor health, commit crimes, or claim welfare and unemployment benefits. Deriving the probabilities involves assembling data from a variety of studies and surveys analyzing the correlation between education and health, crime, and income assistance at the national and state level. We spread the probabilities across the education ladder and multiply the marginal differences by the number of students who achieved CHEs at each step. The sum of these marginal differences counts as the upper bound measure of the number of students who, due to the education they received at the college, will not have poor health, commit crimes, or demand income assistance. We dampen these results by the ability bias adjustment discussed earlier in the student perspective section and in Appendix 6 to account for In addition to the creation of higher tax revenues to the state and local government, education is statistically associated with a variety of lifestyle changes that generate social savings. Figure 3.2: Present value of government savings Income assistance $6.5 million Health $1.1 million Crime $4.9 million Source: Lightcast impact model. 55+1010+3535+U$12.5 million Total government savings Table 3.3: Present value of added tax revenue and government savings (thousands) Added tax revenue $84,078 Government savings Health-related savings $1,098 Crime-related savings $4,910 Income assistance savings $6,521 Total government savings $12,529 Total taxpayer benefits $96,607 Source: Lightcast impact model.
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