Using Return on Investment and Other Related Tools: Guidelines for Measuring Career and Technical Education Internal Efficiency and External Effectiveness

Using Return on Investment and Other Related Tools: Guidelines for Measuring Career and Technical Education Internal Efficiency and External Effectiveness

Jun 2012

Authors:

Pradeep Kotamraju
John L. Mettille III
NRCCTE

Using Return on Investment and Other Related Tools: Guidelines for Measuring Career and Technical Education Internal Efficiency and External Effectiveness was developed after the NRCCTE received numerous requests from the field about how to conduct return on investment (ROI) studies.

The report has two major parts. The first describes different approaches to measuring ROI, describes the steps needed to conduct an ROI study of CTE, and provides a basic protocol that the field might adopt when undertaking ROI studies. The second provides summary abstracts of existing ROI studies—organized by state and the organizational level the study targets (e.g., state, system, or project). A series of appendices provide additional information the field might consider when choosing to follow the common protocol in conducting ROI for CTE.

The field’s need for ROI studies has never been greater, given the pressure on CTE to demonstrate its effectiveness and its efficiency. A major goal of the report was therefore to provide the kinds of information and tools that states and local education agencies need to conduct ROI studies. The report offers a natural starting point for these agencies to generate the hard evidence needed to challenge and refute popular misperceptions regarding the internal efficiency and external effectiveness of CTE held by the broader education and workforce communities.

Executive Summary:

Career and technical education (CTE) is increasingly seen as a major potential contributor to the recovery of the U.S. economy. However, the effectiveness and impact of the current Carl D. Perkins Act (otherwise known as Perkins IV) that governs CTE are unclear. Is the federal investment in CTE paying off? To answer this, we need to establish the internal efficiency of CTE by comparing the costs and benefits of implementing CTE using Perkins funds at different enterprise levels.  A second question is whether CTE has a measurable impact beyond the enterprise level at which it is being implemented. This question focuses on external effectiveness. Answering these questions may put to rest the frequently held notion that CTE—and by association Perkins IV—has been largely ineffective in affecting U.S. education and workforce development (Duncan, 2011). As shorthand, this report will refer to the measurement of the internal efficiency and external effectiveness of Perkins IV and CTE as the return on investment (ROI) for CTE; the report will also describe other related tools that generally fall under the broader rubric of program evaluation (Priest, 2001).

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Kotamraju, P., & Mettille, J. L. III. (2012). Using return on investment (ROI) and other related tools: Guidelines for measuring career and technical education (CTE) internal efficiency and external effectiveness. Louisville, KY: National Research Center for Career and Technical Education, University of Louisville.