Handbook for cost-benefit analysis of health care, education and labour market policies

In 2013, CPB Netherlands Bureau for Economic Policy Analysis and PBL Netherlands Environmental Assessment Agency published General Guidance for Social Cost-Benefit Analysis (SCBA). SCBA is applied to an increasing number of policy areas. SCBA shows for each measure how the benefits compare to the costs and how this depends upon the implementation of the measure. SCBA’s can be used to investigate and optimize policy measures. This is notwithstanding the fact that the final decision requires one to make political choices. An SCBA is an important tool to help with this.

For specific policy areas, handbooks are required that further specify the principles of the General Guidance. In collaboration with Marc Pomp, SEO Amsterdam Economics has written the first handbook based on the General Guidance. The handbook covers the policy areas of health care, education, labour market and social investments in housing.

The handbook presents the conditions for creating a meaningful SCBA. This is followed by a description of suitable ways to design an SCBA. Important elements are the problem analysis, estimation of effects and the attribution of a monetary value to effects. The core consists of concrete recommendations for researchers who perform an SCBA.

The specification of effects that play a role within the Handbook – such as labour market effects – also includes recommendations for SCBAs in other policy areas. Some recommendations are useful for methods of evaluation other than SCBAs as well, such as a cost-effectiveness analysis.