The returns on human capital investment
Policy Applications"We seek critique, not endorsement. Please be harsh. We can handle it."
The 10x Return
Why Social Investment Is the Best Investment
The Core Thesis
Every dollar invested in social services—healthcare, education, early childhood, mental health—returns $5-15 in avoided costs and increased productivity. This isn't ideology; it's accounting. The question isn't whether we can afford social investment—it's whether we can afford not to.
AIP treats social investment as infrastructure—essential foundation for economic productivity, not charity. The returns are measurable, documented, and massive.
Early Childhood Investment
The Perry Preschool Study
Investment: High-quality preschool for low-income 3-4 year olds. Cost: ~$15,000/child (inflation-adjusted).
Higher graduation rates (77% vs 60%)
Higher employment (76% vs 62%)
Higher earnings ($20K+ more annually)
Lower crime (36% fewer arrests)
Less welfare dependence
The Abecedarian Project
4x more likely to graduate college
Higher cognitive scores persisting into adulthood
Better health outcomes (lower heart disease, diabetes)
Children of participants also showed gains
The Science
Brain development is 90% complete by age 5. Investment during this window has permanent effects on cognitive capacity, emotional regulation, and social skills. Early investment literally builds better brains—trying to fix deficits later costs 10x more with worse results.
Healthcare Investment
Preventive Care ROI
Childhood immunizations: $16.50 returned per $1 (avoided disease, disability, death)
Diabetes prevention programs: $5.60 returned per $1 (avoided complications, amputations, dialysis)
Smoking cessation programs: $3-7 returned per $1 (avoided cancer, heart disease, COPD)
Lead paint remediation: $17-220 returned per $1 (avoided cognitive damage, crime, special education)
Mental Health Investment
$193 billion/year in lost earnings
$100+ billion/year in healthcare costs
40% of incarcerated individuals have mental illness
Homelessness, family breakdown, suicide
Depression treatment: $4-6 returned per $1 (productivity gains)
Substance abuse treatment: $4-7 returned per $1 (avoided crime, healthcare)
Early psychosis intervention: $10+ returned per $1 (avoided disability)
Universal Healthcare Math
$4.3 trillion/year (18% of GDP)
30% administrative overhead
28 million uninsured, 40+ million underinsured
Medical bankruptcy #1 cause of bankruptcy
3-5% administrative overhead (like Medicare)
Everyone covered (no uncompensated care)
Preventive focus reduces expensive emergencies
Employers save $15K/employee
Violence Prevention ROI
The Cost of Violence
Each homicide: $17.25 million (medical, criminal justice, lost productivity, quality of life)
Incarceration: $40,000-60,000/prisoner/year (2.1 million incarcerated = $80-120B/year)
What Actually Reduces Crime
Nurse-Family Partnership: Home visits for at-risk mothers. 48% reduction in child abuse, 59% reduction in arrests by age 15. ROI: $5.70 per $1.
Cure Violence (violence interrupters): Treat violence as public health issue. 40-70% reduction in shootings in target areas. ROI: $6-18 per $1.
Cognitive Behavioral Therapy for at-risk youth: 50% reduction in violent crime arrests. ROI: $8-30 per $1.
Summer jobs programs for teens: 43% reduction in violent crime. ROI: $5+ per $1.
Lead remediation: Each 10% reduction in lead exposure = 10% reduction in violent crime. ROI: $17-220 per $1.
The Poverty-Violence Connection
Research consistently shows: poverty causes crime, not the reverse. Areas with cash transfer programs see crime drops. Countries with strong social safety nets have 75% less violent crime than the US. AIP's Stability Accounts directly address root cause.
Education Investment
Individual Returns
High school diploma: +$10,000/year earnings vs dropout
Bachelor's degree: +$32,000/year earnings vs high school
Lifetime earnings difference: $1-2 million
Tax revenue from educated worker: 10-15x more than dropout
Social Returns
Each additional year of education: 10-20% reduction in crime
High school completion: 75% less likely to be incarcerated
Better health outcomes (education correlates with longevity)
Higher civic participation
Children of educated parents do better (intergenerational)
The Dropout Cost
Each dropout costs society $260,000-450,000 over their lifetime (lost taxes, increased welfare, incarceration, healthcare). The US has 1.2 million dropouts/year = $300-500 billion in future costs annually. Investing $50,000 per at-risk student to ensure graduation returns 5-9x.
Housing Investment
Housing First Programs
Providing housing to homeless individuals without preconditions:
Emergency room visits: -58%
Hospital inpatient days: -77%
Jail days: -38%
Shelter use: eliminated
ROI: $2-3 saved for every $1 spent on housing (conservative—doesn't count productivity gains)
The Math of Homelessness
Chronically homeless individual costs taxpayers $30,000-50,000/year (emergency services, jails, shelters). Permanent supportive housing costs $15,000-25,000/year. Housing people is cheaper than leaving them homeless—before counting human dignity.
The Big Picture: Why We Don't Invest
The Mismatch Problem
Social investment returns are real but diffuse and delayed. The politician who funds preschool doesn't get credit when crime drops 20 years later. The corporation that pays taxes for education doesn't capture the benefits of a skilled workforce. Current systems separate who pays from who benefits.
How AIP Fixes This
Stability Accounts create direct link: Investment in people grows their accounts, which funds their services, which enables their productivity.
Long-term structure: 65-year account lifespan matches investment return timelines.
Corporate alignment: Healthy, educated consumers = larger market. Corporations benefit directly from social investment.
Accountability loop: Citizens repay services from account growth. Investment returns are captured, not externalized.
Summary: The ROI of Civilization
Early childhood: $7-12 return per $1
Preventive healthcare: $3-17 return per $1
Mental health treatment: $4-10 return per $1
Violence prevention: $5-30 return per $1
Education completion: $5-9 return per $1
Housing first: $2-3 return per $1
Average across interventions: ~10x return. This isn't charity—it's the highest-return investment available. AIP captures these returns through Stability Accounts, making social investment self-funding.
Discussion Questions for Validators
Are these ROI estimates credible? What are the methodological limitations?
If returns are so high, why hasn't the market solved this?
How do we handle interventions where benefits are diffuse but costs are concentrated?
What's the strongest argument against public social investment?
Does framing social investment as ROI undermine its moral foundation?
How does AIP's accountability structure change these calculations?
Note: ROI figures drawn from peer-reviewed studies but ranges vary by methodology. Validators are invited to challenge specific numbers and request citations. The core claim—that social investment returns exceed costs—is robust across methodologies.