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Investing in prevention and transition of homeless youth pays off

With a new study, we now know with certainty that investing in the future of these young people isn’t just the right thing to do, it is the economically smart thing to do.

For most Minnesotans, the reality of young people living on the streets or hopping from couch to couch is so foreign that it is incomprehensible. Consequently, many ask the question that for them poses the most logical solution to ending youth homelessness: “Why don’t they just go back home?”

Heather Huseby

The reasons young people are experiencing homelessness are as different as the young people themselves.

Maggie was 17 when she left home to escape an abusive stepfather. Jeffrey was 17 when his mother said she couldn’t afford to raise both him and his younger sister. Kenzie’s family was in financial chaos and emotionally dysfunctional; leaving home seemed to the 16-year-old to be the safe choice. (Maggie, Jeffrey and Kenzie are actual YouthLink clients and the details of their stories are accurate. Their names are changed here to protect their privacy.)

Maggie, Jeffrey and Kenzie are among Minnesota’s 4,000 young people experiencing homelessness on any given night. While the details of every person’s story is different, the youth are united by the similarities of their needs, including shelter, health care, food and other basic needs.

Andrea Lubov

Young people come to YouthLink because they need the same things that all 16-to-24-year-olds need to be successful in life — education, security, a connection to peers and mentoring adults and, perhaps most importantly, a recognition that they have value and that their futures have potential. YouthLink and its government, corporate and non-profit partners provide young people experiencing homelessness with a path to financial independence.

All this comes with a cost, of course. About $12,800 is spent per client per year by YouthLink and its partner programs. But not every young person who comes through YouthLink’s doors will succeed, so it’s fair to ask if the total investment is worthwhile.

YouthLink put the challenge to Foldes Consulting, LLC, and independent researcher Andrea Lubov: determine a break-even cost – the number of YouthLink clients who need to become financially self-sufficient to make the investment in all the agency’s clients economically worthwhile.

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Looking at the costs

The investigation began with a cohort of 1,451 non-disabled clients YouthLink served in 2011. The long-term price of not succeeding is high, in the costs imposed on taxpayers and in lost opportunities. These 1,451 clients, as they age from 16 to 64, can be expected to cost taxpayers $360 million for welfare, housing, health care and other support programs, and through the costs of the potential interactions many will have with the criminal justice system. In addition, the lost wages and tax revenues not paid by those who aren’t employed, among other social costs, will be nearly $890 million during their lifetimes if the 1,451 young people continue on their present paths.

And, keep in mind, these are the costs of just one group of young people from one year.

Despite these enormous costs, the break-even figure is remarkably low. If just 89 of the 1,451 youth in the study cohort – about 6 percent – gain financial independence at age 20 Minnesota taxpayers break even. The anticipated long-term costs avoided in taxpayer-funded programs from those 89 success stories are enough to cover the one-year cost of supporting the other 1,362 young people.

Results: a win-win-win story

This is a win-win-win story. Young people experiencing homelessness have a chance to be self-sustaining, contributing members of society. Minnesota’s workforce – which is projected to see no growth in the next decade or so – gains productive new members. And taxpayers are relieved of the cost that comes with lives of dependency.

Proposals are in front of the Minnesota Legislature and Hennepin County to prevent and end youth homelessness and to support the transition of those who are experiencing homelessness to financially independent lives.

YouthLink and its partners long have made the case that clients are writing their own success stories every day. With the break-even study, we now know with certainty that investing in the future of these young people isn’t just the right thing to do, it is the economically smart thing to do.

Heather Huseby, Ed.D., is the executive director of YouthLink. Andrea Lubov, Ph.D., is an independent researcher who helped conduct the break-even study. More information on YouthLink and the break-even study is here


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