Return on Investment Study: 

Minnesota Reading Corps— 

Kindergarten 

Submitted to:

AmeriCorps 

250 E St., SW

Washington, DC 20024

Submitted by:

ICF Incorporated, LLC

9300 Lee Highway

Fairfax, VA 22031

https://www.icf.com

December 18, 2020

This report was commissioned by AmeriCorps’ Office of Research and Evaluation 

under Blanket Purchase Agreement # CNSHQ14A0006 and Contract # 

95332A19F‐0062. Information in this report is in the public domain. Please, direct 

communications related to this report to Lily Zandniapour at 

lzandniapour@cns.gov and Sarah Yue at syue@cns.gov. Cite this report as follows: 

Munaretto, C., Casey, B., Miller, B., Modicamore, D., Naugler, A., & Pershing, J. 

(2020). Return on Investment Study: Minnesota Reading Corps—Kindergarten. ICF.
Return on Investment Study: 

Minnesota Reading Corps—Kindergarten 

i 

CONTENTS

Executive Summary............................................................................................................ ES-1

Minnesota Reading Corps ............................................................................................ES-1

Return on Investment Study Methods ..........................................................................ES-2

Benefits and Costs..........................................................................................................ES-4

ROI Results ......................................................................................................................ES-6

Introduction...............................................................................................................................1

Study Overview ...................................................................................................................1

Program Description.................................................................................................................1

Minnesota Reading Corps Evaluation History...................................................................2

Selection of MRC for the AmeriCorps ROI Project ...........................................................3

ROI Methodology......................................................................................................................4

Monetizing Benefits and Costs...........................................................................................6

ROI Study Limitations.........................................................................................................13

Benefits, Costs, and ROI Results .............................................................................................14

Benefits...............................................................................................................................14

Costs...................................................................................................................................15

ROI Results .........................................................................................................................15

Recommendations for Further Research ..............................................................................17

Conclusion ..............................................................................................................................18

Appendix A: Benefits and Costs Included in Return on Investment Calculations.............19

Benefits...............................................................................................................................19

Costs...................................................................................................................................25

Appendix B: Additional Information on the Methodology..................................................26

Methodology Overview ...................................................................................................27

Measuring Benefits............................................................................................................28

Measuring Costs ................................................................................................................44

ROI Calculation.................................................................................................................44

References ..............................................................................................................................47
Return on Investment Study: 

Minnesota Reading Corps—Kindergarten 

ii

AUTHORS

This study was conducted by researchers from ICF: 

• Claire Munaretto, Senior Economics Analyst

• Brendan Casey, Senior Economics Analyst

• Benjamin Miller, Senior Director

• Dominic Modicamore, Lead Economist

• Alix Naugler, Research Scientist

• Janet Pershing, Vice President
Return on Investment Study: 

Minnesota Reading Corps—Kindergarten 

ES-1 

Executive Summary 

Minnesota Reading Corps

AmeriCorps contracted with ICF Incorporated, 

LLC (hereafter ICF) to explore and quantify the 

return on investment (ROI) of several programs 

that rely on national service—AmeriCorps and 

AmeriCorps Seniors—as a major resource to 

sustain operations. ROI analyses have the 

potential to help AmeriCorps measure the 

performance of programs and to help build the 

base of evidence for future resource allocation 

decisions. In addition, ROI study results will help 

AmeriCorps communicate the value of its 

programs to relevant stakeholders. This ROI 

study measures the benefits of Minnesota 

Reading Corps (MRC) programming for 

kindergarten (MRC Kindergarten) against its 

costs.

Since its launch in 2003, MRC has used

research-based literacy instruction in school 

settings to help children from age three through 

grade three learn to read. The program includes literacy enrichment at the 

pre-kindergarten (PreK) level and tutoring for both PreK and kindergarten through 

third grade (K–3) students. AmeriCorps tutors work with children one-on-one and in small

groups daily, providing literacy interventions that are tailored to each learner’s needs.

AmeriCorps tutors begin their service with rigorous training from literacy experts, who 

give them the knowledge and tools they need to be effective and confident. An 

on-site coach, usually a literacy specialist or teacher at the school, provides daily 

support to tutors and conducts regular check-ins to make sure the tutoring is on track.

Key Results

This study estimates the ROI of 

MRC’s work with kindergartners to 

be between $5.47 and $6.99 per 

funder dollar, depending on how 

long program participants and 

AmeriCorps members experience 

increased earnings as a result of 

MRC. The return on each dollar of 

federal support for the program is 

even higher. The magnitude of 

the results is driven by strong future 

employment and earnings 

outcomes for participants. The 

magnitude of the results is also 

driven by benefits of national 

service to AmeriCorps members 

that increase their future earnings.

MRC Impacts: Selected Evaluation Results

MRC evaluations have particularly robust findings for work with kindergarteners. 

Below are high-level findings from 2014 and 2018 evaluations of MRC: 

• In 2014 and 2018, letter sound fluency for kindergarteners who participated in 

MRC increased by 74 and 68 percent, respectively, over kindergarteners who did 

not participate in MRC.

• The mean scores of letter sound fluency for kindergarteners who participated in 

MRC almost doubled the winter benchmark in 2014 and met the winter 

benchmark in 2018. 

Sources: Markovitz et al. (2014, 2018)
Return on Investment Study: 

Minnesota Reading Corps—Kindergarten 

ES-2 

MRC is the largest AmeriCorps State program in the country. The program’s host 

organization, Reading & Math, Inc., recruits, trains, places, and monitors AmeriCorps 

members. During the 2017–2018 school year, MRC served more than 600 schools 

statewide, reaching more than 20,000 students. Twelve additional states and the District 

of Columbia have adopted the Reading Corps program. Nationwide, the program 

reaches more than 36,000 at-risk students annually. MRC tutors have helped more than 

200,000 struggling Minnesota students become strong readers by the end of third grade

(Minnesota Reading Corps, 2019b). 

This ROI analysis evaluates the costs and benefits from MRC’s kindergarteners

exclusively. This is due to the results of the Markovitz et al. (2014, 2018) evaluations of the 

K–3 program. Kindergarten alone demonstrated both a) a statistically significant 

improvement in reading fluency in the treatment group over the control group, and b) 

achievement of the reading benchmark for the treatment group but not the control 

group. The latter factor enables the analysis to use research that links benchmark 

achievement to long-term outcomes.

Return on Investment Study Methods

The methodology for the MRC Kindergarten ROI study consisted of the following 

components: 

1. Measuring and monetizing program benefits. This included using data from previous 

evaluations and other third-party sources to determine benefits. Benefits are realized 

across three stakeholder groups: MRC Kindergarten participants, MRC Kindergarten

AmeriCorps members, and the government. Specifically, the benefits realized 

include future increased earnings for MRC Kindergarten program participants and 

AmeriCorps members. AmeriCorps members also earn education awards after their 

service and receive living allowances during their service, which are both member 

benefits. Government benefits include tax revenue generation from increased 

economic activity and future earnings, as well as reduced spending on corrections, 

public assistance, and social insurance. This analysis monetized program benefits 

using various proxies and summed those amounts to quantify the impact of the MRC 

Kindergarten program in 2019 dollars.

2. Assessing program costs. MRC Kindergarten program costs were analyzed for the 

2017–2018 academic year in 2019 dollars. Total MRC Kindergarten costs and benefits

are scaled using the percentage of MRC students in kindergarten to develop the 

figures used in the ROI calculations.

3. Calculating the ROI. The ROI analysis consisted of three ROI calculations: 1) total 

benefits per federal dollar, 2) total benefits per funder dollar,1 and 3) federal

government benefits per federal dollar. 

1 The different funder groups whose investment is in this calculation include the federal government (i.e., 

AmeriCorps; 48 percent), the state government (27 percent), private entities (4 percent), and in-kind 

donations (21 percent). 
Return on Investment Study: 

Minnesota Reading Corps—Kindergarten 

ES-3 

The analysis calculated the value of these ROI calculations under three scenarios 

representing different assumptions about the persistence of program outcomes. The 

analytical framework included only those benefits that could be reasonably monetized 

given the available data, and that likely would not have occurred without the 

AmeriCorps program. Figure ES 1 shows how MRC Kindergarten program activities can 

result in benefits to MRC Kindergarten participants, AmeriCorps members, and the 

government. 

Figure ES 1. Benefits among MRC Kindergarten Participants, AmeriCorps Members, and 

Government Derived from MRC

Figure ES 2 shows the benefits and costs that are included in each of the three types of 

ROI calculations. 

Figure ES 2. Benefits and Costs Included in the ROI Calculations

ROI Calculation Benefits (numerator) Costs (denominator)

Total Benefits per Federal 

Dollar (proportional to 

kindergarteners) 

All participant, AmeriCorps 

member, and government 

benefits derived from MRC 

Kindergarten 

• Federal AmeriCorps 

funding

Total Benefits per Funder 

Dollar (proportional to 

kindergarteners) 

All participant, AmeriCorps 

member, and government 

benefits derived from MRC 

Kindergarten 

• Federal AmeriCorps 

funding

• Budgeted match funding

• All other funding

Federal Government Benefits 

per Federal Dollar

(proportional to 

kindergarteners) 

Additional tax revenue 

generation and reduced 

spending attributable to MRC 

Kindergarten 

• Federal AmeriCorps 

funding
Return on Investment Study: 

Minnesota Reading Corps—Kindergarten 

ES-4 

Available data established that both MRC Kindergarten participants and AmeriCorps 

members experience increased educational attainment leading to positive future

employment impacts and increased earnings as a result of the program. However, the 

data do not establish the duration of the increased earnings benefits. To address a 

range of possible durations for those benefits, the analysis includes three scenarios:2 

• Short-Term. This scenario assumes short-term earnings impacts. The assumption is that 

earnings impacts are limited to a single year.

• Medium-Term. This scenario assumes a longer duration of earnings impacts. The 

assumption is that earnings impacts last 15 years. A 3 percent discount rate is 

applied each year to represent net present value in 2019 dollars.3

• Long-Term. This scenario assumes sustained earnings impacts throughout MRC 

Kindergarten participants’ and AmeriCorps members’ working years. The 

assumption is that earnings impacts last 30 years. A discount rate of 3 percent is 

applied to the earnings each year to represent net present value in 2019 dollars. 

The only difference between the three scenarios is the length of time that increased 

employment and earnings are sustained; all other benefits are held constant. 

Note that future employment and earnings impacts for MRC Kindergarten participants 

will only be captured in the medium-term and long-term scenarios because the 

kindergarten-age participants would not graduate high school for another 12 years.

Benefits and Costs

Figure ES 3 shows the estimates of monetized benefits of MRC Kindergarten by 

stakeholder group for each of the three scenarios. Across all scenarios, roughly half of 

the benefits are to the federal government, with the remaining benefits roughly split 

between MRC Kindergarten participants and AmeriCorps members. The vast majority of 

federal government economic benefits are derived from the present value of long-term 

decreases in social spending such as reduced crime, welfare, Medicare, and 

Medicaid, in addition to increased federal tax revenue from increased future earnings 

of MRC Kindergarten participants and AmeriCorps members. 

2 These three scenarios consider varying durations of how long increased employment and earnings 

benefits last for both MRC Kindergarten participants and AmeriCorps members. Certain additional benefits 

are included equally across these three scenarios. Specifically, lifetime benefits with regard to decreased 

public assistance, social insurance, and corrections costs as a result of members’ higher educational 

attainment post-service are represented in each of these three scenarios equally. Thus, whether members’ 

employment and earnings impacts are sustained for one year (i.e., short-term scenario) or 30 years (i.e., 

long-term scenario), the same amount of these cost savings is realized. 3 The Office of Management and Budget (1992) defines a discount rate as, “The interest rate used in 

calculating the present value of expected yearly benefits and costs” (p. 18). Regarding the 3 percent

discount rate, see Office of Management and Budget (2003). 
Return on Investment Study: 

Minnesota Reading Corps—Kindergarten 

ES-5 

Figure ES 3. Benefits from MRC Kindergarten Program by Recipient

Recipient

Benefits by Scenario (2019$)

Short-Term Medium-Term Long-Term

MRC Kindergarten Participants

(percent of total)

$8,753,559 

(25%) 

$10,184,419 

(26%) 

$14,264,049 

(32%) 

MRC Kindergarten AmeriCorps 

Members (percent of total)

$6,749,147 

(19%) 

$8,310,903 

(21%) 

$8,803,705 

(20%) 

Federal Government

(percent of total)

$19,465,664 

(56%) 

$20,473,813 

(53%) 

$21,679,205 

(48%) 

Total MRC Kindergarten Benefits

(total percent)

$34,968,370

(100%)

$38,969,135

(100%)

$44,746,958

(100%)

Note: All benefits are proportional to the number of kindergarteners in the program.

Figure ES 4 shows the cost of the MRC Kindergarten program by funding source. The 

total cost of the MRC Kindergarten program for the 2017–2018 academic year was 

$17,831,041. Roughly half of MRC Kindergarten program costs were funded by the 

federal government. In-kind donations consisted of staffing and other operating needs. 

For example, internal coaches paid by their school districts contributed a small portion 

of their time to support the MRC Kindergarten program as an in-kind donation. These 

costs are scaled using the ratio of kindergarteners to all students served. Note that all 

dollar values are shown in 2019 dollars to allow for a comparison of costs and benefits 

across time.

Figure ES 4. Cost of MRC Kindergarten by Funding Source

Funder

Funding Provided 

for the Program 

Year (2019$)

Percent 

of Total (%)

Scaled Kindergarten 

Funding – 31% Students 

Served (2019$)

MRC 2017-2018 Sources

Federal Government $8,663,263 42% $2,664,176 

State Government $4,904,285 24% $1,508,193 

Private Entities $722,850 3% $222,295 

In-kind Donations $3,805,950 18% $1,170,427 

MRC Subtotal $18,096,349 87% $5,565,091 

AmeriCorps Educational 

Stipends* $2,708,857 13% $833,043 

Total $20,805,205 100% $6,398,134 

*Anticipated educational stipends for AmeriCorps members to be paid out following their service year.

Note: Values may not sum due to rounding.
Return on Investment Study: 

Minnesota Reading Corps—Kindergarten 

ES-6 

ROI Results

For each ROI calculation, this analysis developed three ROI estimates using the three 

scenarios (short-term, medium-term, and long-term). Figure ES 5 shows the ROI results for 

the MRC Kindergarten program. The ROIs expressed as cost–benefit ratios in this study 

can be interpreted as the number of dollars returned for every dollar of investment (or 

cost).4 

Figure ES 5. ROI Results for MRC Kindergarten

ROI Calculation (2019$)

ROI Scenario

(Proportional to Kindergarteners) 

Short-Term Medium-Term Long -Term

Total Benefits per Federal Dollar $10.11 $11.27 $12.94 

Total Benefits per Funder Dollar $5.47 $6.09 $6.99 

Federal Government Benefits per Federal Dollar $5.63 $5.92 $6.27 

Under the short-term scenario for the first row of Figure ES 5, the ROI of total benefits

divided by federal government spending is $10.11. This indicates that MRC Kindergarten

participants, AmeriCorps members, and the government realize a combined return of 

$10.11 on every dollar invested by the federal government (i.e., AmeriCorps). Under the 

long-term scenario, MRC Kindergarten total benefits per federal dollar are $12.94. 

The second ROI calculation looked at total benefits per funder dollar, with results 

ranging from $5.47 to $6.99. The third ROI calculation looked at federal government 

benefits per federal dollar, with results ranging from $5.63 to $6.27. 

Across all scenarios and all ROI calculations, this analysis demonstrates that MRC 

Kindergarten is an impactful use of federal funds. Leveraging AmeriCorps support, MRC 

Kindergarten generates benefits that are at least five times greater than costs.

Given the different assumptions of the three scenarios, the respective benefits across all 

three ROI calculations are larger than their associated costs. At a minimum—when 

considering solely the federal government investment provided by AmeriCorps and the 

benefits that would be realized for the federal government alone—the MRC 

Kindergarten program still yields a positive return (as shown under the short-term

scenario with an ROI of $5.63 per dollar invested). 

The magnitude of the positive ROI calculations is driven by several factors, including:

4 Since two of the calculations include benefits to society (i.e., MRC program participants and AmeriCorps 

members), the results are expressed as cost–benefit ratios, while maintaining the ROI terminology. 

Specifically, these ratios take the form of the sum of monetized benefits over the sum of costs. ROIs are 

often expressed as percentages when measuring the financial return to a single entity from that entity’s 

investment. Although this is consistent with one of the three ROI metrics reported (ROI to federal 

government), since the other ROIs lend themselves to a cost–benefit ratio, that ratio is consistently used for 

all three metrics. Although not shown as a ratio, the results should be interpreted as the return for every 

dollar of investment. 
Return on Investment Study: 

Minnesota Reading Corps—Kindergarten 

ES-7 

• The expected long-term benefits/cost savings of increased high school credential 

attainment for MRC kindergarteners. Levin et al. (2007) found that the present value 

of lifetime federal economic benefits expected per high school graduate 

compared to a high school dropout ranges from $118,000 to $206,000, by race and 

gender. Applying the findings from Markovitz et al. (2014, 2018), Stanley et al. (2018), 

and Hernandez (2012), the MRC Kindergarten program is estimated to prevent 

97 kindergarteners from becoming high school dropouts. 

• The employment outcomes of AmeriCorps members. According to the national 

AmeriCorps Alumni Outcomes Survey study (Friedman et al., 2016), the percentage 

of members unemployed was 5 percentage points lower six months after serving in 

AmeriCorps versus six months before. This analysis assumed that MRC Kindergarten

AmeriCorps members ages 35 and younger would experience increased 

employment.

• The educational benefits to AmeriCorps members. AmeriCorps alumni can use 

education award funds to help pay for postsecondary degrees after exiting the 

program. Increased educational attainment for these individuals generates a 

stream of positive impacts for both the individual and the government, such as 

increased income, decreased reliance on social programs, and decreased 

criminality. Note that these benefits are scaled down using the ratio of the dollar 

value of the education award to the average cost of tuition for each respective 

degree type.5 Additionally, AmeriCorps alumni can use education awards to repay 

student loans. In this case, only the value of the post-tax education award is 

assumed to be a cost savings for members due to avoided out-of-pocket cost

5 This analysis treats the use of the education award to attend school or to repay loans in the same fashion. 

For example, if the dollar value of the education award is equal to 6 percent of the full cost of tuition for a 

bachelor’s degree, AmeriCorps is credited with 6 percent of the benefits of attaining that degree, whether 

the member used the award to attain a bachelor’s degree after completing service, or to repay the loan 

for a bachelor’s degree attained pre-service.
Return on Investment Study: 

Minnesota Reading Corps—Kindergarten 

1 

Introduction 

AmeriCorps contracted with ICF Incorporated, LLC (hereafter ICF) to explore and 

quantify the return on investment (ROI) of several programs that rely on national service

as a major resource to sustain operations. ROI analyses measure the performance of 

programs and build the base of evidence for future resource allocation decisions. ROI 

study results demonstrate the value of AmeriCorps programming to relevant 

stakeholders. 

This project began with a comprehensive literature review process and preliminary 

assessments of whether ROI analyses were feasible for five national service programs. 

These feasibility studies included thorough reviews of these programs’ recent 

evaluations, detailed logic models, proposed ROI analysis methodologies for each 

program, and a scorecard mechanism that determined the viability of conducting an 

ROI for each selected program. 

Upon completion of five feasibility studies, AmeriCorps selected four programs to be the 

subject of ROI studies: College Possible, the Community Technology Empowerment 

Project, Minnesota Reading Corps (MRC), and AmeriCorps Seniors’ Foster Grandparent 

and Senior Companion Programs. This ROI study measures the benefits of MRC’s 

programming for kindergarten against its costs based on the analytical approach and 

data sources specified in its respective feasibility study. 

Study Overview

This study is organized into five sections:

• Program Description describes the program’s design, activities, and objectives, 

along with the role that national service (specifically AmeriCorps) plays in its 

operation. The section also provides a brief history of past evaluations and outlines 

the factors that made this program a strong selection for an ROI study. 

• ROI Methodology outlines how this analysis used various data sources to monetize 

benefits derived from the MRC Kindergarten program and describes its program 

costs. 

• Benefits, Costs, and ROI Results provides a detailed description of the benefits and 

costs that are inputs into the ROI analyses and presents the results of the three ROI 

calculations.

• Recommendations for Further Research explores ways in which AmeriCorps and 

others could further build the evidence base for this program and similar programs, 

including how to address limitations of this study.

• Conclusion summarizes key points from the ROI study overall. 

Program Description 

Since its launch in 2003, MRC has used research-based literacy instruction in school 

settings to help children from age three through grade three learn to read. The 

program includes literacy enrichment at the pre-kindergarten (PreK) level and tutoring 
Return on Investment Study: 

Minnesota Reading Corps—Kindergarten 

2 

for both PreK and kindergarten through third grade (K–3) students. AmeriCorps tutors 

work with children one-on-one and in small groups daily, providing literacy interventions 

that are tailored to each learner’s needs. AmeriCorps tutors begin their service with 

rigorous training from literacy experts, who give them the knowledge and tools they 

need to be effective and confident. An on-site coach, usually a literacy specialist or 

teacher at the school, provides daily support to tutors and conducts regular check-ins 

to make sure the tutoring is on track (Minnesota Reading Corps, 2019a). 

MRC is the largest AmeriCorps State program in the country. The program’s host 

organization, Reading & Math, Inc., recruits, trains, places, and monitors AmeriCorps 

members. During the 2017–2018 school year, MRC served more than 600 schools 

statewide, reaching more than 20,000 students. Twelve additional states and the District 

of Columbia have adopted the Reading Corps program. Nationwide, the program 

reaches more than 36,000 at-risk students annually. MRC tutors have helped more than 

200,000 struggling Minnesota students become strong readers by the end of third grade

(MRC, 2019b). 

Minnesota Reading Corps Evaluation History

Two evaluations—Markovitz et al. (2014,6 2018)—measured the impacts of the MRC

program. These evaluations, conducted by the non-partisan and objective research 

organization NORC at the University of Chicago, executed randomized control trials as 

well as experimental and non-experimental analyses of the MRC program. The main 

objectives of the evaluations were to determine the impact of the MRC program on 

student literacy outcomes, and whether program impacts vary by participant 

characteristics, such as demographics. 

Both studies evaluated K–3 students throughout the state of Minnesota. The 2014 study 

evaluated schools that enrolled in the voluntary program. Within those schools, the 

study implemented a randomized control trial, randomly assigning 1,300 K–3 students at 

23 schools during the 2012–2013 school year to treatment and control groups for the fall 

semester, and matching each student with another in the opposite research group. The 

2018 study largely replicated the 2014 design, but with roughly half of the sample size.7

Given the robust methods applied, this ROI study is based on the findings from both the 

Markovitz et al. (2014, 2018) NORC evaluations. 

The ROI analysis estimates the costs and benefits of MRC’s kindergarten programming 

only. Kindergarten was the only grade level for which evaluation results met two 

conditions necessary for ROI analysis:

6 This study was funded by AmeriCorps. 7 Differences between the Markovitz et al. 2014 and 2018 evaluations include that in the 2018 evaluation, 

the second and third graders received a full year of the MRC program; it evaluated second and third 

grade students who scored farthest from the benchmark in the fall; it included only Innovative Approaches 

to Literacy (IAL) grant recipient schools (i.e., rural and high-poverty urban); and it included independent 

outcome assessment data collection.
Return on Investment Study: 

Minnesota Reading Corps—Kindergarten 

3 

1. Difference in reading fluency. If the evaluation did not demonstrate a significant 

difference between treatment and control groups, it would not be defensible to 

attribute future benefits to the program. 

2. Difference in meeting benchmarks. Studies of the long-term impacts of early 

childhood reading ability rely on whether a student has met benchmarks. Therefore, 

stronger reading performance by treatment groups compared to control groups 

alone would not justify including a grade level in the ROI analysis. Grade levels 

would need to have a difference in whether the treatment and control groups met 

the benchmark as well. 

See Appendix B for more information on the selection of kindergarten as the focus of 

this analysis.

Key findings related to MRC Kindergarten from the Markovitz et al. (2014, 2018) studies

include the following: 

• Kindergarteners who participated in MRC saw a percentage increase of 74 and 68 

in letter sound fluency scored in 2014 and 2018, respectively, over kindergarteners 

who did not participate in MRC.

• The mean scores of letter sound fluency for kindergarteners who participated in 

MRC almost doubled the winter benchmark in 2014 and met the winter benchmark 

in 2018. 

This ROI study used these improvements in letter sound fluency and applied additional 

results from the literature as well as MRC Kindergarten participant demographics to 

estimate increased educational outcomes among MRC Kindergarten participants

(Hernandez, 2012; Stanley et al., 2018).8

Selection of MRC for the AmeriCorps ROI Project

ICF recommended making the MRC program the subject of an ROI analysis based on a 

comprehensive feasibility study. The feasibility study noted the Markovitz et al. (2014, 

2018) studies of the program and explored how to use available data to monetize 

relevant benefits and costs. Based on its review, ICF concluded that the K–3 program—

potentially restricted to one or more grade levels—was feasible as the subject of an ROI 

analysis. ICF reached this conclusion based on a review of the existing literature 

connecting literacy outcomes to attainment of long-term outcomes, specifically high 

school graduation. As discussed in the methodology, estimating high school graduation 

impacts allows the ROI analysis to include monetary estimates of outcomes related to 

earnings and public expenditures on health, criminal justice, and welfare.

8 The literature, including Stanley et al. (2018) and Hernandez (2012), can be combined to yield estimated 

benefits of kindergarten literacy and a reduced high school dropout rate. Stanley et al. (2018) found that 

kindergarten literacy may explain approximately 36 percent of the variance in third grade oral reading 

fluency. Hernandez (2012) connects third grade reading scores to high school graduation rates and found 

that 16 percent of non-proficient third grade readers drop out of high school, and only 4 percent of 

proficient third grade readers drop out of high school.
Return on Investment Study: 

Minnesota Reading Corps—Kindergarten 

4 

The feasibility study also identified research that could be used to quantify the benefits 

to AmeriCorps members due to their involvement in MRC via national service. In 

particular, a 2016 study by Freidman et al. documented the post-national service 

employment outcomes associated with serving in AmeriCorps. Additionally, Zeidenberg 

et al. (2016) estimated the extent to which national service increases members’ 

educational attainment. Including these additional data allowed an expanded array 

of benefits of the MRC program to be captured in the ROI analysis.

ROI Methodology 

The methodology for the MRC Kindergarten ROI study consists of the following 

components: 

1. Measuring and monetizing program benefits. This includes using data from previous 

evaluations and other third-party sources to determine the benefits to the MRC 

Kindergarten program participants, AmeriCorps members, and the government. The 

benefits realized across these three stakeholder groups include: 

• MRC Program Participants. Increased education leading to increased earnings.

• AmeriCorps Members. Living allowances received during their service, education 

awards received following service, and increased earnings post-service. 

• Government. Income, Social Security, and Medicare tax revenue from MRC

Kindergarten participants’ and members’ increased earnings and sales tax 

revenue from the increased economic activity that results from those increased 

earnings. Government benefits also include reduced spending on corrections, 

public assistance, and social insurance associated with the increased 

educational attainment of MRC Kindergarten participants and AmeriCorps 

members. 

This ROI analysis monetized MRC Kindergarten program benefits in 2019 dollars.

2. Assessing program costs. MRC Kindergarten program costs are based on the MRC 

program budget and consist of federal and other funding for the 2017–2018 fiscal 

year in 2019 dollars.9

3. Calculating the ROI. Total MRC costs and benefits are scaled using the percentage 

of MRC students in kindergarten to develop the figures used in the ROI calculations. 

The ROI analysis includes three ROI calculations, which are each assessed under 

three scenarios representing different assumptions about the persistence of program 

outcomes: 

• Total benefits per federal dollar 

• Total benefits per funder dollar

• Federal government benefits per federal dollar

9 The different funder groups whose investment is in this calculation include the federal government (i.e., 

AmeriCorps; 48%), the state government (27%), private entities (4%), and in-kind donations (21%). 
Return on Investment Study: 

Minnesota Reading Corps—Kindergarten 

5 

This analytical framework includes only those benefits that could be reasonably 

monetized given the available data, and that likely would not have occurred without 

the AmeriCorps program. Figure 1 shows how MRC Kindergarten program activities can 

result in MRC Kindergarten participant, AmeriCorps member, and government benefits. 

Figure 1. Benefits among MRC Kindergarten Participants, AmeriCorps Members, and 

Government Derived from MRC Kindergarten

Available data established that both MRC Kindergarten participants and AmeriCorps 

members enjoy positive future earnings impacts because of MRC Kindergarten. 

However, the data do not establish the duration of these benefits. To address a range 

of possible durations for these benefits, the analysis developed three scenarios: 10 

• Short-Term. This scenario assumes short-term earnings impacts. The assumption is that 

earnings impacts are limited to a single year.

• Medium-Term. This scenario assumes a longer duration of earnings impacts. The 

assumption is that earnings impacts last 15 years. A 3 percent discount rate is 

applied each year to represent net present value in 2019 dollars.11

• Long-Term. This scenario assumes sustained earnings impacts throughout MRC 

Kindergarten participants’ and AmeriCorps members’ working years. The 

assumption is that earnings impacts last 30 years. A discount rate of 3 percent is 

applied to the earnings each year to represent net present value in 2019 dollars. 

The only difference between the three scenarios is the length of time that increased 

employment and earnings are sustained; all other benefits are held constant. 

10 These three scenarios consider varying durations of how long increased employment and earnings 

benefits last for both MRC participants and AmeriCorps members. Certain additional benefits are included 

equally across these three scenarios. Specifically, lifetime benefits with regard to decreased public 

assistance, social insurance, and corrections costs as a result of participants’ and members’ higher 

educational attainment post-program and post-service, respectively, are represented in each of these 

three scenarios equally. Thus, whether participants’ or members’ employment and earnings impacts are 

sustained for one year (i.e., short-term scenario) or 30 years (i.e., long-term scenario), the same amount of 

these cost savings is realized. 11 The Office of Management and Budget (1992) defines a discount rate as, “The interest rate used in 

calculating the present value of expected yearly benefits and costs” (p. 18). Regarding the 3 percent

discount rate, see Office of Management and Budget (2003).
Return on Investment Study: 

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The three scenarios consider varying durations of how long increased employment and 

earnings benefits last for both MRC kindergartener participants and AmeriCorps 

members. Certain additional benefits are included equally across these three scenarios. 

For instance, lifetime benefits with regard to decreased public assistance, social 

insurance, and corrections costs as a result of both MRC Kindergarten participants’ and 

AmeriCorps members’ higher educational attainment are represented in each of these 

three scenarios equally as present values. Thus, whether members’ employment and 

earnings impacts are sustained for one year (i.e., short-term scenario) or 30 years (i.e., 

long-term scenario), the same present value amount of these lifetime cost savings are 

realized.

The long-term scenario (30 years of sustained employment and earnings benefits) 

represents roughly a lifetime of working years for a given person, while the short-term

scenario assumes benefits for only the year after program participation or service. The 

medium-term scenario (15 years of sustained employment and earnings benefits) 

represents the midpoint between the short-term and long-term scenarios. 

Monetizing Benefits and Costs

This analysis monetized an array of benefits and included MRC Kindergarten costs all in 

2019 dollars to assess the ROI. Additional details on the methodology employed and 

the calculations used for this analysis are in Appendix B.

Benefits

MRC results in monetizable benefits to MRC Kindergarten participants, AmeriCorps 

members, and the government. Figure 2 summarizes these benefits and data sources 

by stakeholder group.
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Figure 2. Benefits Realized from MRC Kindergarten by Stakeholder Group

Stakeholder 

Group Benefits Data Sources*

MRC 

Kindergarten 

Participants

• Additional earnings from increased 

education12

• Markovitz et al. (2014, 2018)

• Reading & Math, Inc.13

• Stanley et al. (2018) 

• Hernandez (2012) 

• Levin et al. (2007) 

• Current Population Survey 

(CPS) earnings (U.S. Census 

Bureau, 2018)

• Consumer Price Index (U.S. 

Bureau of Labor Statistics, n.d.) 

AmeriCorps 

Members

• Education awards 

• Additional earnings from increased 

education due to education award

• Living allowances 

• Additional earnings from increased 

employment (Friedman et al., 2016) 

• Friedman, et al. (2016) 

• Zeidenberg, et al. (2016) 

• Reading & Math, Inc.

• CPS earnings (U.S. Census 

Bureau, 2018)

• Trostel (2015) 

• Consumer Price Index (BLS, 

n.d.) 

12 Because MRC Kindergarten participants are in the 5 to 6 age range during the 2018 program year, 

additional earnings from increased education are only estimated in the medium-term and long-term 

scenarios for the years that occur after participants are expected to graduate from high school. 13 Unless otherwise cited, all information provided directly by Reading & Math, Inc. for this report was 

received through ICF’s personal communication with Reading & Math, Inc. in 2019. 
Return on Investment Study: 

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Stakeholder 

Group Benefits Data Sources*

Government • Tax revenue from increased MRC 

Kindergarten participant earnings 

post-program and sales tax revenue 

from the induced increased 

economic activity

• Public economic benefits (i.e., tax 

payments, health savings, reduced 

crime, welfare savings, etc.) from 

increased MRC participant education

• Tax revenue from increased 

AmeriCorps member earnings postnational service and sales tax revenue 

from the induced increased 

economic activity

• Reduced spending on corrections, 

public assistance, and social 

insurance associated with increased 

educational attainment of 

AmeriCorps members post-national 

service 

• Consumer Expenditure Survey 

(BLS, 2018) 

• Federal and state income tax 

rates (Internal Revenue 

Service, 2018) 

• Social Security tax rate (Social 

Security Administration, 2018) 

• Medicare tax rate (SSA, 2018) 

• Combined state and average 

local sales tax rates (Tax 

Foundation, 2019) 

• Trostel (2015) 

* Note: The usage of these data sources is discussed in more detail in the subsequent paragraphs. 

Additionally, for the state income and the combined state and average local sales tax rates used in this 

ROI analysis, tax rates used on MRC participants’ increased earnings and on AmeriCorps members’ living 

allowances are specific to Minnesota. Tax rates used on AmeriCorps members’ increased earnings and 

education awards are national averages.

Additional Earnings from Increased Education (Benefit to MRC Kindergarten 

Participants)

Markovitz et al. (2014, 2018) found that kindergarteners who participated in the MRC 

randomized control trial averaged a 46 percent increase in literacy over the 

benchmark. Stanley et al. (2018) found that kindergarten literacy may explain 

approximately 36 percent of the variance in third grade oral reading fluency. 

Hernandez (2012) connects third grade reading scores to high school graduation rates, 

finding that 16 percent of non-proficient third grade readers drop out of high school, 

but only 4 percent of proficient third grade readers drop out of high school. 

To estimate the number of kindergarteners who will no longer drop out of high school

due to participation in MRC, the analysis used the number of kindergarteners in the

MRC program in the 2017–2018 academic year (4,826) and multiplied it by the 

averaged 46 percent increase in literacy over the benchmark.14 The result is then 

scaled by 36 percent, representing the variance in third grade oral reading fluency that 

is explained by kindergarten literacy. Next, the number of students who are expected 

14 Reading & Math, Inc. provided data on the number of students enrolled in MRC. 
Return on Investment Study: 

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to see improved third grade oral reading fluency is multiplied by the difference in high 

school dropout rates by third grade reading scores (12 percent) to estimate the number 

of students who will no longer drop out of high school because of improved literacy 

due to MRC Kindergarten participation.15 

To calculate expected increased earnings, the analysis then estimated the gender and 

race of those kindergarteners who are less likely to drop out of high school. To estimate 

these demographics, the study leveraged MRC’s 2017–2018 academic year’s 

demographics and Current Population Survey (CPS) data (U.S. Census Bureau, 2018) on 

the difference in annual median earnings for individuals with a high school degree over 

those without a high school degree, by race and gender. The analysis used the 

Consumer Price Index (CPI; U.S. Bureau of Labor Statistics, n.d.) to express the resulting

dollar estimate in 2019 dollars. As the MRC Kindergarten participants are children 

(roughly 6 years old) at the time of the intervention, only the medium-term and longterm scenarios (which extend 15 and 30 years, respectively, from the 2017–2018 

academic year) capture the benefit of increased earnings after the MRC Kindergarten

participants are expected to graduate from high school.

Additional Earnings from Increased Employment (Benefit to AmeriCorps 

Members)

Evaluations have shown that serving in AmeriCorps fosters higher skill acquisition, 

increased educational attainment, and higher income from increased employment 

post-national service (Friedman et al., 2016; Markovitz et al., 2008; Spera et al., 2013; 

Zeidenberg et al., 2016). Freidman et al. (2016) found that unemployment among 

AmeriCorps members six months after their period of national service was 5 percentage 

points lower compared to six months before.16 To monetize this decrease in 

unemployment, the analysis first applied the 5 percentage point reduction in 

unemployment to the number of AmeriCorps members ages 35 or younger for MRC’s

2017–2018 academic year, and then applied the product to the median annual

earnings by demographic in terms of their race, gender, age, and educational 

attainment.17 

The analysis proceeded to:

• Estimate the additional AmeriCorps members employed attributable to national 

service

• Estimate the annual median earnings of the AmeriCorps members by demographic 

• Calculate the total earnings for AmeriCorps members attributable to the increased 

employment

15 For additional information, please review the Benefits to MRC Participants section of Appendix B. 16 See page 56 of Friedman et al. (2016). 17 Reading & Math, Inc. provided demographic data on AmeriCorps members who served during the 

2017–2018 academic year. 
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The earnings metrics for AmeriCorps members were applied and discounted based on 

the short-term, medium-term, and long-term scenarios in net present 2019 dollars. The 

post-tax AmeriCorps members’ projected earnings represents the additional income 

earned by AmeriCorps members attributable to their participation in national service.

Education Awards and Living Allowances (Benefits to AmeriCorps Members)

AmeriCorps members receive living allowances during their national service term and 

education awards after program exit. Both living allowances and education awards 

are taxable, so post-tax amounts were used to calculate benefits to members. 

Living Allowances. AmeriCorps members use living allowances to pay for expenses 

during their service terms. This post-tax amount represents a direct benefit to 

AmeriCorps members. 

Education Awards. AmeriCorps members can use education awards to a) pay for

additional educational attainment and b) repay student loans. Friedman et al. (2016) 

studied how AmeriCorps members allocate their education awards between these 

eligible uses. 

• Education award used to pay for additional educational attainment. This analysis 

estimated the expected increased earnings attributable to AmeriCorps members’ 

increased educational attainment post-service as a result of using the education 

award to pay for additional schooling. Based on Friedman et al. (2016), the analysis 

estimated the amount in post-tax education awards that MRC AmeriCorps 

members used to pay for additional educational attainment. The analysis then 

estimated the value of the additional educational attainment attributable to the 

education awards in terms of lifetime earnings. These estimated additional earnings 

were included as a benefit to AmeriCorps members. 

• Education award used to repay student loans. The amount of post-tax education 

awards used to repay student loans, as identified by Friedman et al. (2016), was 

included in the ROI analysis as a direct one-time benefit to AmeriCorps members. 

Tax Revenue Generation and Reduced Spending (Benefits to Government)

The benefits of MRC to program participants and AmeriCorps members also result in 

benefits to the various levels of government.

Benefits to the Government from Increased Educational Attainment by MRC 

Kindergarten Participants 

Similar to the timeframe of MRC Kindergarten participants’ increase in educational 

attainment and median annual earnings, benefits to governments are also only 

captured in the medium-term and long-term scenarios, not in the short-term scenario. 

Achievement of a high school degree increases employment opportunities and thus 

expected median annual earnings. Government benefits from increased educational 

attainment by MRC Kindergarten participants in the form of:
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• Income tax revenue from increased MRC Kindergarten participant earnings 

post-program. The analysis estimated federal income tax, state income tax, 

Medicare, and Social Security tax for the additional earnings of MRC Kindergarten

participants based on 2019 rates. For both the federal and state income tax rates, 

the analysis used the appropriate rate based on the estimated median annual 

earnings of participants, post-program participation. For the state income tax, the 

analysis used a rate for Minnesota, assuming that MRC Kindergarten participants 

continue to reside in that state over the course of their working years.

• Sales tax revenue from the increased economic activity that results from increased 

MRC Kindergarten participant earnings post-program. To estimate the additional 

sales tax revenue generated due to the additional net earnings, the analysis 

multiplied the combined state and average local sales tax rate for Minnesota by the 

estimated taxable expenditures to income ratio for consumers whose income falls in 

the expected annual earnings bracket for the MRC Kindergarten participants who 

are expected to achieve an increase in education and thus earnings (using the 

Consumer Expenditure Survey; BLS, 2018). The resulting product was then applied to 

the additional earnings of MRC Kindergarten participants to calculate the increase 

in sales tax revenue to state and local governments. 

• Reduced spending on public assistance from increased educational attainment of 

MRC Kindergarten participants. As a result of increased education, those with a high 

school degree are expected to receive less public assistance than those without a 

high school degree. The analysis estimated savings to the federal government with 

regard to public assistance, including lifetime reduced criminal activity, lifetime 

welfare cost savings, lifetime public health savings, and lifetime public health costs 

(i.e., Medicaid, Medicare) using data provided by Levin et al. (2007). 

Benefits to the Government from Increased Earnings and Educational Attainment 

by AmeriCorps Members 

Government benefits from increased earnings and educational attainment by 

AmeriCorps members in the form of:

• Income tax revenue from increased AmeriCorps member earnings post-national 

service. The analysis estimated federal income tax, state income tax, Medicare, and 

Social Security tax for the additional earnings of AmeriCorps members based on 

2019 tax rates. The analysis estimated tax rates based on the annual median 

earnings of the MRC AmeriCorps members’ education level and demographics. The 

analysis used average state income tax rates for the United States, given that 

AmeriCorps members may disperse to various locations nationwide following their 

service terms and continue to migrate over the course of their working years.

• Sales tax revenue from the increased economic activity that results from increased 

AmeriCorps member earnings post-service. To estimate the additional sales tax 

revenue generated due to the additional net earnings, the analysis multiplied the 

average combined state and local sales tax for the United States by the estimated 

taxable expenditures to income ratio for consumers whose income is similar to that 

of the AmeriCorps member earnings post-service (using the Consumer Expenditure 
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Survey; BLS, 2018). The resulting product was then applied to the additional earnings 

of the AmeriCorps members to calculate the increase in sales tax revenue to state 

and local governments.

• Tax revenue from living allowances and education awards. The living allowance 

provided to MRC AmeriCorps members during their service term is taxable. This 

analysis applied all the aforementioned tax rates to estimate this additional 

government revenue. The analysis used Minnesota state income and state sales tax

rates. 

Education awards are also taxable, resulting in additional government revenue. The 

education award is, however, subject to federal and state taxes,18 such as income, 

Social Security, and Medicare taxes, and these taxes were accounted for in the ROI 

model.19 Sales taxes were not calculated for education awards since this award 

amount cannot be used for consumer purchases.

• Reduced spending on corrections, public assistance, and social insurance 

associated with increased educational attainment of AmeriCorps members

post-service. The last benefit related to MRC Kindergarten AmeriCorps members

captured by this ROI study is the lifetime reduction in public assistance, social 

insurance, and corrections/incarceration spending due to the higher educational 

attainment of members (Trostel, 2015). Higher educational attainment is associated 

with less dependence on government assistance programs and lower incarceration 

rates (Blagg & Blom, 2018; Harlow, 2003). Because AmeriCorps participation 

increases educational attainment, the government spends less. 

To monetize these benefits, the analysis paired the expected increase in 

educational attainment for AmeriCorps members with the expected difference in 

per-person lifetime government cost savings from Medicaid, the Supplemental 

Nutrition Assistance Program (SNAP), unemployment insurance, workers’ 

compensation, and incarceration for individuals. This method conservatively 

calculated the savings realized by government for AmeriCorps members. Note, 

these benefits were only estimated for those members obtaining additional 

education post-service.

Costs

The costs for the MRC program used for this ROI analysis include federal and other 

funding used to support program operations. The costs are specific to the program 

participant cohort for which the outcomes are measured. Figure 3 shows the 

segmentation of MRC program costs by funder. The data were provided by Reading & 

Math, Inc. for the 2017–2018 academic year. Note that these costs represent total costs. 

When necessary, these costs are scaled using the ratio of kindergarteners to all students

served. The AmeriCorps federal funds included the living allowances provided to 

participating AmeriCorps members during this service year and the educational award 

amounts granted to these members once they completed their service term. 

18 A nationwide average rate for state income taxes is used due to the unknown location of AmeriCorps 

members at the time of redemption.

19 See AmeriCorps (2020b) for more on the tax implication of the AmeriCorps member education award. 
Return on Investment Study: 

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Of note, while AmeriCorps is the leading funder for MRC (sponsoring nearly 50 percent

of program costs), MRC’s match spending was 109 percent of federal funds for 

2017–2018. This match rate suggests that federal funding catalyzes other funding 

sources for the MRC program, allowing it to serve more individuals and provide more 

services than would be otherwise be available only under the federal funds, which

translates into increased benefits across stakeholder groups. The total cost of the MRC

program for the 2017–2018 academic year was $18,096,349 in 2019 dollars (Figure 3). 

Approximately half of MRC program costs are funded by the federal government. 

Funding from the state of Minnesota and private funders, plus in-kind donations by 

grantees, totaled $9,433,085 or 109 percent of federal funding. An example of a 

grantee in-kind donation includes internal coaches who are paid by their school district 

but contribute a small portion of their time to support the MRC program. Note that all 

dollar values are shown in 2019 dollars in order to allow for a comparison of costs and 

benefits across time.

Figure 3. MRC Kindergarten Program Costs, K–3 by Funder Type

Funder

Funding Provided 

for the Program 

Year (2019$)

Percent of 

Total (%)

Scaled Kindergarten 

Funding – 

31% students 

served (2019$)

MRC 2017-2018 Sources

Federal $8,663,263 42% $2,664,176 

State Government $4,904,285 24% $1,508,193 

Private $722,850 3% $222,295 

In-kind Donations $3,805,950 18% $1,170,427 

MRC Subtotal $18,096,349 87% $5,565,091 

AmeriCorps Educational 

Stipends* $2,708,857 13% $833,043

Total $20,805,205 100% $6,398,134 

* Anticipated educational stipends for AmeriCorps members to be paid out following their service year.

Note: Values may not sum due to rounding.

ROI Study Limitations

There are some limitations to consider that contextualize the findings of the ROI analysis. 

Some of the data sources used—specifically Friedman, et al. (2016), which describes 

program impacts for AmeriCorps members—include data that are self-reported using 

surveys. Specific outcomes for the MRC AmeriCorps members were not available. 

Similarly, the results of Markovitz et al. (2014, 2018) yield outcomes in terms of literacy

improvements, not data on employment and earnings outcomes of how MRC

participation helps participants obtain additional education and employment. The 

study instead relies on a number of assumptions to bridge the gap between 

demonstrated literacy improvements and individual outcomes.
Return on Investment Study: 

Minnesota Reading Corps—Kindergarten 

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This ROI study focuses on MRC programming for kindergarteners alone. MRC also serves 

pre-kindergarteners, first, second, and third graders. 

Lastly, the evaluation does not capture possible improvements in well-being, socioeconomic status, or health of MRC participants and their families linked to the 

program’s effect on educational attainment. Data were not available to estimate 

these potential additional benefits, which may increase the program’s return. 

Benefits, Costs, and ROI Results

The ROI for MRC Kindergarten measures the benefits of the program compared to its 

costs to determine the return to different stakeholders. This section provides estimates of 

benefits, costs, and the resulting ROI.

Benefits

Figure 4 shows estimates of monetized benefits of MRC Kindergarten by recipient, 

including MRC Kindergarten participants, AmeriCorps members, and the federal

government for each scenario.20 As described above, both MRC Kindergarten

participants and AmeriCorps members enjoy positive future earnings impacts as a result 

of MRC Kindergarten. However, the data do not establish the duration of those 

benefits. To address a range of possible durations for those benefits, the analysis 

developed three scenarios: 1) short-term, assuming earnings impacts are limited to a 

single year; 2) medium-term, assuming earnings impacts last 15 years and diminish at a 

discount rate of 3 percent; and 3) long-term, assuming earnings impacts last 30 years 

and diminish at a discount rate of 3 percent. Again, lifetime cost savings to the various 

levels of governments as well as other benefits not associated with participants’ or 

members’ increased earnings (such as living allowances and education awards)

remain constant in all three scenarios.

Figure 4. Benefits of MRC Kindergarten by Recipient

Recipient

Benefits by Scenario (2019$)

Short-Term Medium-Term Long-Term

MRC Participants

(percent of total)

$8,753,559 

(25%) 

$10,184,419 

(26%) 

$14,264,049 

(32%) 

AmeriCorps Members

(percent of total)

$6,749,147 

(19%) 

$8,310,903 

(21%) 

$8,803,705 

(20%) 

Federal Government 

(percent of total)

$19,465,664 

(56%) 

$20,473,813 

(53%) 

$21,679,205 

(48%) 

Total (total percent) $34,968,370

(100%)

$38,969,135

(100%)

$44,746,958

(100%)

Note: All benefits are proportional to the number of kindergarteners in the program.

20 Benefits to MRC participants and AmeriCorps members are inclusive of their respective state and local 

government benefits.
Return on Investment Study: 

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Costs

Figure 5 shows MRC costs by category. Costs are presented for the full K–3 program and 

also for MRC Kindergarten alone. Note, all dollar values are shown in 2019 dollars to 

allow for a comparison of costs and benefits across time.

Figure 5. Total MRC Costs by Category

Category Cost (2019$)

Scaled 

Kindergarten 

Funding – 31% 

Students Served 

(2019$)

Total AmeriCorps Member Stipend $6,137,673 $1,887,492 

Total Operating Costs, Less AmeriCorps Stipend $11,958,676 $3,677,600 

Total Expected Education Grant Value Redeemed $2,708,857 $833,043 

Total Costs, 2017-18 Academic Year $20,805,205 $6,398,134

Total Federal Costs, 2017-18 Academic Year $11,372,120 $1,887,492

Note: Values may not sum due to rounding. 

ROI Results

Figure 6 shows the benefits and costs that are included in each ROI calculation. 

Figure 6. Benefits and Costs Included in the ROI Calculations 

ROI Calculation Benefits (numerator) Costs (denominator)

Total Benefits per Federal 

Dollar (proportional to 

kindergarteners) 

All participant, AmeriCorps 

member, and government 

benefits derived from the 

program 

• Federal AmeriCorps 

funding

Total Benefits per Funder 

Dollar (proportional to 

kindergarteners) 

All participant, AmeriCorps 

member, and government 

benefits derived from the 

program 

• Federal AmeriCorps 

funding

• Budgeted match funding

• All other funding

Federal Government Benefits 

per Federal Dollar 

(proportional to 

kindergarteners) 

Additional tax revenue 

generation and reduced 

spending attributable to the 

program 

• Federal AmeriCorps 

funding
Return on Investment Study: 

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Figure 7 summarizes ROI results for MRC Kindergarten across the short-term, mediumterm, and long-term scenarios. Three different ROI results are calculated for each 

scenario. Since two of the scenarios include benefits to society (MRC Kindergarten

participants and AmeriCorps members), the results are expressed as cost–benefit ratios, 

while maintaining the ROI terminology. The ratio takes the form of the sum of monetized 

benefits over the sum of monetized costs. The ROI expressed as a cost–benefit ratio in 

this study can be interpreted as the number of dollars returned for every dollar of 

investment (or cost). See Appendix B for the formulas used to calculate each ROI.

Figure 7. ROI Results for MRC Kindergarten

ROI Calculation (2019$)

ROI Scenario

Short-Term Medium-Term Long -Term

Total Benefits per Federal Dollar $10.11 $11.27 $12.94 

Total Benefits per Funder Dollar $5.47 $6.09 $6.99 

Federal Government Benefits per Federal Dollar $5.63 $5.92 $6.27 

Under the short-term scenario for the first row of Figure 7, the ROI of total benefits 

divided by federal government spending is $10.11. This indicates that MRC Kindergarten 

participants, AmeriCorps members, and the government realize a combined return of 

$10.11 on every dollar invested by the federal government (i.e., AmeriCorps). Under the 

long-term scenario, MRC Kindergarten total benefits per federal dollar are $12.94. 

The second ROI calculation looked at total benefits per funder dollar, with results 

ranging from $5.47 to $6.99. The third ROI calculation looked at federal government 

benefits per federal dollar, with results ranging from $5.63 to $6.27. 

Across all scenarios and all ROI calculations, this analysis demonstrates that MRC

Kindergarten is an impactful use of federal funds. Leveraging AmeriCorps support, MRC 

Kindergarten generates benefits that are at least five times greater than costs.

Given the different assumptions of the three scenarios, benefits are larger than their 

associated costs across all three ROI calculations. At a minimum—when considering 

solely the federal government investment provided by AmeriCorps and the benefits 

that would be realized for the federal government alone—MRC’s programming for 

kindergarten still yields a positive return (as shown under the short-term scenario with an 

ROI of $5.63). This indicates that given the most conservative assumptions and ROI 

calculation, the federal government still receives a monetary return greater than the 

funding allocated to pay for MRC Kindergarten’s annual operations. 

The magnitude of the positive ROI calculations is driven by several factors, including:

• The expected long-term benefits/cost savings of increased high school credential 

attainment for MRC kindergarteners. Levin et al. (2007) found that the present value 

of lifetime federal economic benefits expected per high school graduate

(increased tax payments and reduced federal spending) compared to a high 

school dropout ranges from $118,000 to $206,000, by demographics. Applying the 

findings from Markovitz et al. (2014, 2018), Stanley et al. (2018), and Hernandez 
Return on Investment Study: 

Minnesota Reading Corps—Kindergarten 

17 

(2012), the MRC Kindergarten program is estimated to prevent 97 kindergarteners 

from becoming high school dropouts.21

• The employment outcomes of AmeriCorps members. According to the national 

AmeriCorps Alumni Outcomes Survey study, the percentage of members 

unemployed was 5 percentage points lower six months after serving in AmeriCorps 

versus six months before (Friedman et al., 2016). 

• The educational benefits to AmeriCorps members. With the receipt of education 

awards, AmeriCorps alumni can use these funds to help pay for postsecondary 

degrees after exiting the program. 

Recommendations for Further Research 

Future ROI studies for national and community service programs, such as MRC, can be 

strengthened in several ways.

Recommendation 1: Document outcomes using third-party data. Using third-party data, 

along with or in place of self-reported data, can also improve the accuracy of 

AmeriCorps member outcome measurements. While self-reported data are easier to 

obtain, especially via survey, it has several disadvantages. Some answers may be 

exaggerated, respondents may not answer honestly, and response biases could affect 

results. Where possible, AmeriCorps programs should leverage data from third-party 

sources either to provide data for their program evaluation or to corroborate findings 

from self-reported data from previous AmeriCorps members. For example, if 

employment and earnings outcomes are of interest, unemployment insurance data 

could be used to verify wages or employment status. 

Recommendation 2: Determine the persistence of short- and long-term impacts for both 

program participants and AmeriCorps members. Future studies of the MRC program 

should examine how and why the benefits of MRC intervention vary and persist across 

grade levels, and whether MRC participation leads to other significant benefits outside 

of kindergarten. This could allow for the estimation of more benefits from impacts that 

are currently not captured for grades one through three. The persistence of long-term 

impacts, such as earnings, is often not measured in evaluations because they require 

long-term tracking. Although a scenario-based approach that accounts for variations 

in the persistence of impacts can be used, rigorous research on the long-term impact of 

programming will enable AmeriCorps to determine a single value for ROI calculations 

and avoid relying on the scenario-based approach. 

Recommendation 3: Quantify ripple effects. Earnings impacts on program participants 

and AmeriCorps members likely have positive benefits for those individuals’ families and 

communities. Rigorous research on those potential ripple effects would enable 

AmeriCorps to capture a broader array of benefits of this and other programs, which 

would increase the resulting ROI. 

21 For additional information, please review the Benefits to MRC Participants section of Appendix B.
Return on Investment Study: 

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Conclusion 

The results suggest that investment in MRC Kindergarten yields favorable impacts across 

a variety of stakeholder groups. Specifically, impacts are realized by MRC Kindergarten

participants, AmeriCorps members, and the government. MRC Kindergarten

participants benefit from improved literacy, which can lead to a reduced likelihood of 

dropping out of high school. A high school degree can lead to improved employment 

and earning outcomes. As MRC Kindergarten instructors, AmeriCorps members gain 

valuable work experience, preparing them for future employment or educational 

pursuits. In addition, the government benefits from the improved employment and 

earnings outcomes of MRC Kindergarten participants and AmeriCorps members. 

Government benefits take the form of additional tax revenue and reduced spending 

on public assistance, corrections, and other types of expenditures. 

The results of the ROI indicate that the benefits realized by MRC Kindergarten

participants, AmeriCorps members, and the government strongly outweigh the 

investment made by funders (e.g., federal, state, and local governments as well as 

other community-based organizations that provide program funding). The ROI 

estimates are all significantly positive. The use of short-term, medium-term, and longterm scenarios allowed for a range of estimates. Even the most conservative scenario—

the short-term scenario—suggests that MRC Kindergarten delivers a large ROI. 
Return on Investment Study: 

Minnesota Reading Corps—Kindergarten 

19 

Appendix A: Benefits and Costs Included in Return on Investment Calculations 

Benefits

In Figure A-1, the three rightmost columns indicate by an “X” if the benefit is included in the numerator of a return on 

investment (ROI) calculation.

Figure A-1. Benefits Included in ROI Calculations

Benefit

Stakeholder 

Group Data Sources

Total Benefits 

per Federal 

Dollar

Total Benefits 

per Funder 

Dollar

Federal 

Government 

Benefits per 

Federal Dollar

Increased earnings 

due to increased 

educational 

attainment of 

program 

participants

Program 

participant

• Markovitz et al. (2014, 2018) 

• Stanley et al. (2018) 

• Hernandez (2012) 

• Current Population Survey (CPS) 

earnings (U.S. Census Bureau, 2018) 

• Consumer Price Index (CPI) for All 

Urban Consumers, Midwest region 

(U.S. Bureau of Labor Statistics, n.d.)

X X

Increased income 

tax revenue due to 

increased earnings 

of program 

participants

Federal and 

state 

governments

• Markovitz et al. (2014, 2018) 

• Stanley et al. (2018) 

• Hernandez (2012)

• CPS earnings (U.S. Census Bureau, 

2018) 

• CPI for All Urban Consumers, 

Midwest region (BLS, n.d.)

• Tax rate data (Social Security 

Administration, 2018; Tax

Foundation, 2019)

X X X
Return on Investment Study: 

Minnesota Reading Corps—Kindergarten 

20 

Benefit

Stakeholder 

Group Data Sources

Total Benefits 

per Federal 

Dollar

Total Benefits 

per Funder 

Dollar

Federal 

Government 

Benefits per 

Federal Dollar

Increased Social 

Security and 

Medicare tax 

revenue due to 

increased earnings 

of program 

participants

Federal 

government

• Markovitz et al. (2014, 2018) 

• Stanley et al. (2018) 

• Hernandez (2012) 

• CPS earnings (U.S. Census Bureau, 

2018) 

• CPI for All Urban Consumers, Midwest 

region (BLS, n.d.) 

• SSA (2018) 

X X X 

Increased sales tax 

revenue due to 

increased earnings

of program 

participants

State and 

local 

governments

• Markovitz et al. (2014, 2018) 

• Stanley et al. (2018) 

• Hernandez (2012) 

• CPS earnings (U.S. Census Bureau, 

2018) 

• CPI for All Urban Consumers, Midwest 

region (BLS, n.d.) 

• Tax rate data (Tax Foundation, 2019)

• Consumer Expenditure Survey (BLS, 

2018) 

X X 

Lifetime reduced 

spending in public 

health, criminal 

activity, and welfare 

due to increased 

educational 

attainment of

program 

participants

Federal 

government

• Markovitz et al. (2014, 2018) 

• Stanley et al. (2018) 

• Hernandez (2012) 

• Levin et al. (2007) 

• CPI for All Urban Consumers, Midwest 

region (BLS, n.d.) 

X X X 
Return on Investment Study: 

Minnesota Reading Corps—Kindergarten 

21 

Benefit

Stakeholder 

Group Data Sources

Total Benefits 

per Federal 

Dollar

Total Benefits 

per Funder 

Dollar

Federal 

Government 

Benefits per 

Federal Dollar

Increased earnings 

of national service 

members due to 

reduced 

unemployment of 

national service 

members

National 

service 

member

• Friedman et al. (2016) 

• CPS earnings (U.S. Census Bureau, 

2018) 

• CPI for All Urban Consumers, Midwest 

region (BLS, n.d.) 

X X 

Increased income 

tax revenue due to 

reduced 

unemployment of 

national service 

members

Federal and 

state 

governments

• Friedman et al. (2016) 

• CPS earnings (U.S. Census Bureau, 

2018) 

• CPI for All Urban Consumers, Midwest 

region (BLS, n.d.) 

• Tax rate data (SSA, 2018; Tax 

Foundation, 2019) 

X X X 

Increased Social 

Security and 

Medicare tax 

revenue due to 

increased earnings 

of national service 

members

Federal 

government

• Friedman et al. (2016) 

• CPS earnings (U.S. Census Bureau, 

2018) 

• CPI for All Urban Consumers, Midwest 

region (BLS, n.d.) 

• SSA (2018) 

X X X 
Return on Investment Study: 

Minnesota Reading Corps—Kindergarten 

22 

Benefit

Stakeholder 

Group Data Sources

Total Benefits 

per Federal 

Dollar

Total Benefits 

per Funder 

Dollar

Federal 

Government 

Benefits per 

Federal Dollar

Increased sales tax 

revenue due to 

reduced 

unemployment of 

national service 

members

State and 

local 

governments

• Friedman et al. (2016) 

• CPS earnings (U.S. Census Bureau, 

2018) 

• CPI for All Urban Consumers, Midwest 

region (BLS, n.d.) 

• Tax rate data (Tax Foundation, 2019) 

• Consumer Expenditure Survey (BLS, 

2018) 

X X 

Increased earnings 

of national service 

members due to 

educational 

attainment partially 

funded by 

AmeriCorps

National 

service 

member

• AmeriCorps (2020a) Education Award 

• National Center for Education 

Statistics (NCES, 2018) 

• CPS earnings (U.S. Census Bureau, 

2018) 

• CPI for All Urban Consumers, Midwest 

region (BLS, n.d.) 

• Trostel (2015) 

X X 
Return on Investment Study: 

Minnesota Reading Corps—Kindergarten 

23 

Benefit

Stakeholder 

Group Data Sources

Total Benefits 

per Federal 

Dollar

Total Benefits 

per Funder 

Dollar

Federal 

Government 

Benefits per 

Federal Dollar

Increased income 

tax revenue due to 

educational 

attainment partially 

funded by 

AmeriCorps of 

national service 

members

Federal and 

state 

governments

• AmeriCorps (2020a) Education Award 

• CPS earnings (U.S. Census Bureau, 

2018) 

• CPI for All Urban Consumers, Midwest 

region (BLS, n.d.) 

• NCES (2018) 

• Tax rate data (SSA, 2018; Tax 

Foundation, 2019) 

X X X 

Increased Social 

Security and 

Medicare tax 

revenue due to 

educational 

attainment partially 

funded by 

AmeriCorps of 

national service 

members

Federal 

government

• AmeriCorps (2020a) Education Award 

• CPS earnings (U.S. Census Bureau, 

2018) 

• CPI for All Urban Consumers, Midwest 

region (BLS, n.d.) 

• NCES (2018) 

• SSA (2018) 

X X X 

Increased sales tax 

revenue due to 

educational 

attainment partially 

funded by 

AmeriCorps of 

national service 

members

State and 

local 

governments

• AmeriCorps (2020a) Education Award 

• CPS earnings (U.S. Census Bureau, 

2018) 

• CPI for All Urban Consumers, Midwest 

region (BLS, n.d.) 

• NCES (2018) 

• Tax rate data (Tax Foundation, 2019)

• Consumer Expenditure Survey (BLS, 

2018) 

X X 
Return on Investment Study: 

Minnesota Reading Corps—Kindergarten 

24 

Benefit

Stakeholder 

Group Data Sources

Total Benefits 

per Federal 

Dollar

Total Benefits 

per Funder 

Dollar

Federal 

Government 

Benefits per 

Federal Dollar

AmeriCorps 

member living 

allowances and 

education awards

National 

service 

member

• AmeriCorps (2020a) Education Award 

• Reading & Math, Inc.22

X X 

Reduced spending 

on lifetime public 

assistance, 

corrections, and 

social insurance due 

to increased 

educational 

attainment of 

national service 

members

Federal, 

state, and 

local 

governments 

• Trostel (2015) 

• CPS earnings (U.S. Census Bureau, 

2018) 

• CPI for All Urban Consumers, Midwest 

region (BLS, n.d.) 

X X X 

22 Unless otherwise cited, all information provided directly by Reading & Math, Inc. for this report was received through ICF’s personal 

communication with Reading & Math, Inc. in 2019. 
Return on Investment Study: 

Minnesota Reading Corps—Kindergarten 

25 

Costs

In Figure A-2, the three rightmost columns indicate by an “X” if the cost is included in the denominator of an ROI 

calculation.

Figure A-2. Costs Included in ROI Calculations

Cost Stakeholder Group Data Sources

Total Benefits 

per Federal 

Dollar

Total Benefits 

per Funder 

Dollar

Federal 

Government 

Benefits per 

Federal Dollar

AmeriCorps costs for 

education awards, 

living allowances, 

and other MRC 

program grant 

funding

Federal 

government 

(AmeriCorps)

• AmeriCorps (2020a) Education 

Award 

• Reading & Math, Inc.

X X X 

State and local 

government funding

State/local 

government

• Reading & Math, Inc. X 

Other nongovernment costsNon-government 

funders

• Reading & Math, Inc. X 
26 

Return on Investment Study: 

Minnesota Reading Corps—Kindergarten 

Appendix B: Additional Information on the Methodology 

This appendix provides additional details on the methodology used for this study of 

Minnesota Reading Corps (MRC) Kindergarten, as a supplement to the methodology 

section in the main report. It describes the steps used to calculate the return on 

investment (ROI), the results of interim calculations that contribute to the ROI

calculations, and assumptions that underlie the analyses. 

This ROI analysis evaluates the costs and benefits of MRC’s kindergarten programming 

only, due to the results of the Markovitz et al. (2014, 2018) studies. The 2014 study 

evaluated 1,300 kindergarten through third grade (K–3) students, of which 359 were 

kindergarteners, while the 2018 study evaluated 622 K–3 students, of which 60 were 

kindergarteners. The 2014 study found that kindergarten, first, and third grade students 

who received MRC tutoring achieved statistically significant higher literacy assessment 

scores than students who did not. The level of magnitude was largest for 

kindergarteners, almost doubling the control group. Similarly, in the 2018 study, 

kindergarten students who received MRC tutoring achieved significantly higher letter 

sound fluency scores by the end of the first semester, achieving the benchmark,

compared to kindergarten control students who did not participate in the program. 

First, second, and third grades were excluded from this analysis for various reasons. The

Markovitz et al. (2014) study did not find significant effects for second grade students, 

and thus the second grade was excluded. The 2014 study found that first and third 

grade students who received MRC tutoring achieved significantly higher literacy 

assessment scores than students who did not. The Markovitz et al. (2018) study found 

repeat results for first graders and for a pooled second and third grade group. While

there were significant effects for first and third grade students, these impacts were not 

large enough to push an underachieving student to meet the benchmark. For 

example, the 2014 study found that average first grade scores achieved the winter 

benchmark, regardless of program involvement, and the 2018 study found that 

average first grade scores did not achieve the winter benchmark, regardless of 

program involvement. For third graders, both the 2014 and 2018 studies found that the 

average third grader did not achieve the winter benchmark, regardless of program 

involvement. 

Studies of the long-term impacts of early childhood reading ability typically rely on 

whether or not a student has met the benchmark. While there may be benefits from 

improvements in reading ability for students who still fail to reach the benchmark, these 

benefits cannot be rigorously quantified with the data and research available. As 

shown in Figure B-1, kindergarteners in the 2018 study were the only grade level in which 

the mean scores for the treatment group achieved the benchmark and the control 

group did not.
27 

Return on Investment Study: 

Minnesota Reading Corps—Kindergarten 

Figure B-1. Summary of Benchmark Achievement by MRC Treatment and Control 

Groups

Grade

Statistically Significant 

Differences in Reading 

Fluency Scores – Treatment 

over Control

Mean Scores in Meeting/

Achieving Benchmarks*, **

2014 2018*** 2014 − C 2014 − T 2018 − C 2018 − T 

K Yes Yes Yes Yes No Yes

1 Yes Yes Yes Yes No No

2 No

Yes

No No No No

3 Yes No No No No

Sources: Markovitz et al. (2014, 2018) 

* Note: C = control group, T = treatment group

** The 2014 study uses the winter benchmark for all grades. The 2018 study uses the winter benchmark for 

kindergarten and first grades, and the spring benchmark for second and third grades. 

*** The 2018 study pools second and third graders into one group.

The decision about which grade level or levels to include in the ROI was based on two 

factors: 

1. Difference in reading fluency. If the evaluation did not demonstrate a significant 

difference between treatment and control groups, it would not be defensible to 

attribute future benefits to the program. 

2. Difference in meeting benchmarks. Studies of the long-term impacts of early 

childhood reading ability rely on whether a student has met benchmarks. Therefore, 

stronger reading performance by treatment groups compared to control groups 

alone would not justify including a grade level in the ROI analysis. Grade levels

would need to have a difference in whether the treatment and control groups met 

the benchmark as well. 

Only the kindergarten group met both of these conditions. 

Methodology Overview 

Calculating the ROI for MRC Kindergarten included the following steps: 

• Measuring and monetizing program benefits to MRC Kindergarten participants, 

AmeriCorps members, and the different levels of government 

• Assessing program costs 

• Calculating the ROI 

This ROI analysis included only those benefits that could be reasonably monetized given 

the available data, and that likely would not have occurred without the AmeriCorps 

program. 
28 

Return on Investment Study: 

Minnesota Reading Corps—Kindergarten 

Although both MRC Kindergarten participants and AmeriCorps members experience 

positive benefits (described in the next section), available data do not establish how 

long these impacts are sustained over time. Three scenarios address a range of possible 

durations for those benefits: 

• Short-Term. This scenario assumes short-term earnings impacts. The assumption is that 

earnings impacts are limited to a single year.

• Medium-Term. This scenario assumes a longer duration of earnings impacts. The 

assumption is that earnings impacts last 15 years. A 3 percent discount rate is 

applied each year to represent net present value in 2019 dollars.23

• Long-Term. This scenario assumes sustained earnings impacts throughout MRC 

Kindergarten participants’ and AmeriCorps members’ working years. The 

assumption is that earnings impacts last 30 years. A discount rate of 3 percent is 

applied to the earnings each year to represent net present value in 2019 dollars. 

The only difference between the three scenarios is the length of time that increased 

employment and earnings are sustained; all other benefits are held constant.24 Note

that future employment and earnings impacts for MRC Kindergarten participants will 

only be captured in the medium-term and long-term scenarios because the 

kindergarten-age participants won’t graduate high school for another 12 years. 

For each ROI calculation, this analysis produced three ROI estimates corresponding to

the three scenarios. (See the ROI Calculation section.) 

Measuring Benefits

The first step in calculating the ROI for MRC Kindergarten was to measure the program 

benefits. As a result of MRC Kindergarten, participants, AmeriCorps members, and 

various levels of the government benefit. These benefits were identified through an 

extensive literature review and data collection process. The methods used to measure 

benefits for each of these stakeholders are described next. 

Benefits to MRC Participants

Two evaluations by Markovitz et al. (2014, 2018) measured the impacts of the MRC 

program for children in kindergarten through third grade (K–3). These evaluations, 

conducted by the non-partisan and objective research organization NORC at the 

University of Chicago, included randomized control trials as well as experimental and 

23 The Office of Management and Budget (1992) defines a discount rate as, “The interest rate used in 

calculating the present value of expected yearly benefits and costs” (p. 18). Regarding the 3 percent

discount rate, see Office of Management and Budget (2003). 24 These three scenarios consider varying durations of how long increased employment and earnings 

benefits last for both MRC participants and AmeriCorps members. Certain additional benefits are included 

equally across these three scenarios. Specifically, lifetime benefits with regard to decreased public 

assistance, social insurance, and corrections costs as a result of participants’ and members’ higher 

educational attainment post-program and post-service, respectively, are represented in each of these 

three scenarios equally. Thus, whether participants’ or members’ earnings impacts are sustained for one 

year (i.e., short-term scenario) or 30 years (i.e., long-term scenario), the same amount of these cost savings 

is realized. 
29 

Return on Investment Study: 

Minnesota Reading Corps—Kindergarten 

non-experimental analyses. The main objectives of the evaluations were to determine 

the impact of the MRC K–3 program on student literacy outcomes, and whether

program impacts vary by participant characteristics, such as demographics. The 2014 

study evaluated 1,300 K–3 students, of which 359 were kindergarteners. The 2018 study 

evaluated 622 K–3 students, of which 60 were kindergarteners. 

Markovitz et al. (2014, 2018) found that kindergarteners averaged a roughly 46 percent

increase in literacy over the benchmark. Stanley et al. (2018) found that kindergarten 

literacy may explain approximately 36 percent of the variance in third grade oral 

reading fluency. Hernandez (2012) found that 16 percent of non-proficient third grade 

readers drop out of high school, and only 4 percent of proficient third grade readers 

drop out of high school. 

Applying these findings to MRC’s 4,826 kindergarteners in the 2017–2018 academic 

year, an estimated 97 (4,826 x 46% x 36% x (16%-4%))25 kindergarteners enrolled in the 

MRC program are less likely to drop out of high school. This analysis assumes that a key 

impact of MRC is that 97 kindergarteners will no longer drop out of high school. The 

estimated 97 kindergarteners were then demographically weighted based on the MRC 

program participants’ demographics, which can be seen in Figure B-2.26 To estimate 

the additional annual earnings attributable to increased high school graduation levels 

due to MRC Kindergarten, the estimated numbers of additional graduates by 

demographic category are multiplied by the estimated additional annual earnings. 

Figure B-2. Additional High School Graduates and Expected Median Annual Additional

Earnings (2019$)

MRC 

Kindergarten

Participants

Additional High 

School Graduates

Annual Additional 

Earnings ($)

Total Annual Additional 

Earnings ($)

Race/Ethnicity Male Female Male Female Male Female

White 33 34 $11,050 $9,763 $368,389 $334,790 

Black 6 6 $7,364 $5,901 $43,380 $35,752 

Hispanic 4 4 $7,899 $5,998 $28,808 $22,501 

Other 5 5 $10,682 $7,994 $51,521 $39,661 

Total 48 49 NA NA $924,802

Sources: Markovitz et al. (2014, 2018), Stanley et al. (2018), Hernandez (2012), Reading & Math, Inc., Current 

Population Survey (U.S. Census Bureau, 2018) 

Note: Values may not sum due to rounding.

25 Note: Values may not sum due to rounding. 26 Unless otherwise cited, all information provided directly by Reading & Math, Inc. for this report was 

received through ICF’s personal communication with Reading & Math, Inc. in 2019. 
30 

Return on Investment Study: 

Minnesota Reading Corps—Kindergarten 

Figure B-3 shows the gross earnings of the MRC Kindergarten participants for the three 

scenarios, discounted at a 3 percent rate.27 Along with the earnings, Figure B-3 also 

shows the lifetime reduction in public assistance payments received due to the MRC 

Kindergarten participants’ reduced likelihood of dropping out of high school (Levin et 

al., 2007). In other words, it shows the reduced spending on welfare, healthcare costs, 

and criminal justice costs for MRC participants due to their increased educational 

attainment (i.e., high school completion). This is a lifetime benefit and remains constant 

across the three scenarios. 

Figure B-3. Additional Earnings for MRC Participants and Resulting Public Benefits by 

Scenario (2019$)

Scenario

Gross Additional 

Earnings of MRC 

Participants ($)

Reduced Public 

Assistance ($)

Payroll Tax 

Payments* ($)

Estimated 

Additional Sales 

Tax Revenue ($)

Short-Term NA $26,197,469 NA NA

Medium-Term $1,780,785 $26,197,469 $475,470 $46,457 

Long-Term $6,858,108 $26,197,469 $1,831,115 $178,912 

*Note: Summed federal and state income, Medicare, and Social Security taxes based on gross earnings of 

MRC participants. 

This analysis also calculated the federal income tax (Internal Revenue Service, 2018),

state income tax (Tax Foundation, 2019), and Medicare and Social Security taxes 

(Social Security Administration, 2018) on the additional income.28 The summation of 

these taxes for each of the three scenarios is shown in Figure B-3. Subtracting those 

taxes from the gross additional income resulting from the increased educational 

attainment for MRC Kindergarten participants yields post-tax income. From the post-tax 

income, additional sales tax revenue to the state of Minnesota (as well as local 

governments within the state) is estimated, assuming MRC Kindergarten participants 

remain in Minnesota.29 These estimates are presented across the three scenarios. Note 

that at the time of the MRC Kindergarten program, the participants are kindergarteners

and thus would not experience additional educational attainment that affects earnings 

until at least 12 years later. As a result, no additional earnings and resulting benefits are 

estimated for the short-term scenario, three years of additional earnings are estimated 

for the medium-term scenario, and 18 years of additional earnings are estimated for the 

long-term scenario. 

27 The guidance to use a 3 percent discount rate can be seen in Office of Management and Budget 

(2003).

28 For the additional high school graduates, the analysis assumes a federal marginal income tax rate of 

12 percent, the state income tax rate for Minnesota (7.05 percent), Medicare (1.45 percent), and Social 

Security (6.20 percent). The assumed Minnesota sales tax, state and local, is 7.43 percent. 29 U.S. Bureau of Labor Statistics’ (2018) Consumer Expenditure Survey reflects that for the income bracket 

of MRC participants who would benefit from additional annual earnings, their expected taxable 

expenditures would be 53 percent. 
31 

Return on Investment Study: 

Minnesota Reading Corps—Kindergarten 

Benefits to AmeriCorps Members

The AmeriCorps members who provide services to the MRC participants also 

experience benefits due to their service. This analysis estimates these benefits: 

• Living allowance and education award

• Increased earnings due to increased education derived from the education award

• A 5 percentage point reduction in unemployment due to AmeriCorps service30

Note that the benefits to AmeriCorps members are presented here for the full 

population of members serving in the MRC program. When calculating the ROI, these 

benefits are scaled using the ratio of kindergarten students to all students served.

Living Allowance and Education Award 

Living allowances are given to AmeriCorps members during their one-year service term 

to pay for various living expenses, such as housing and groceries. Regarding education 

awards, according to Friedman et al. (2016), a significant portion of AmeriCorps State 

and National alumni use them to pay for additional education at colleges, graduate

schools, and technical schools, while others use them to pay off outstanding student 

loans. 

Both the living allowances and education awards (considered one-time benefits that 

are not discounted or spread over time) are taxable. This analysis included the post-tax 

value of living allowances for the 684 MRC AmeriCorps members in the ROI analysis as 

AmeriCorps member benefits (Figure B-4). The benefits derived from education awards 

are described in detail next. When calculating the ROI, these benefits are scaled using 

the ratio of kindergarteners to total students served by the MRC program.

Figure B-4. Additional AmeriCorps Member Benefits

Benefit

Post-Tax Value31

(2019$) Notes

Living Allowance (net) $4,726,008 Post-tax living allowances members 

receive during service 

Education Award (net) Used 

for Schooling $2,085,820 

Post-tax education award amount, 

assumed used to pay for schooling 

(college, technical training program, 

loans, etc.)

Total $6,811,828

Sources: Reading & Math, Inc., tax rates (IRS, 2018; SSA, 2018; Tax Foundation, 2019), AmeriCorps (2020a) 

30 According to Friedman et al. (2016), the percentage of members unemployed was 5 percentage points 

lower six months after serving in AmeriCorps than six months before.

31 Refer to the Benefits to Government section regarding taxation assumptions.
32 

Return on Investment Study: 

Minnesota Reading Corps—Kindergarten 

Increased Earnings due to Increased Education Derived from the Education 

Award 

The AmeriCorps Education Award pays for some portion of member educational 

attainment, and the future earnings derived from the educational attainment is treated 

as a direct benefit to AmeriCorps members. This analysis used tuition cost data from the 

National Center for Education Statistics (NCES, 2018) to calculate the portion of 

member educational attainment that is attributable to MRC. Figure B-5 details the

average total cost of tuition for each degree type from NCES (2018) and the portion of 

that cost that the $6,19532 education award ($4,574 after taxes) amount represents. 

These percentages were used to estimate the lifetime benefits of educational 

attainment that can be attributed to the education award. For example, according to 

NCES (2018), the average annual cost of a public, in-state, four-year academic 

institution during the 2017–2018 academic year was $20,050, which amounts to over 

$80,000 for four years. The $4,574 post-tax education award only represents 6 percent of 

the cost of that degree so, accordingly, AmeriCorps is only credited that percentage of 

the lifetime benefits of an AmeriCorps member’s bachelor’s degree. The same 

percentage is calculated for each degree type to estimate the portion of the lifetime 

benefits for each that is credited to AmeriCorps. 

Figure B-5. Average Total Cost of Education by Degree 

Degree Type Cost (2019$)

Percent of Degree 

Tuition Covered by 

Education Award (%)

Associate/Technical Degree $6,709 68% 

Bachelor’s Degree $82,957 6% 

Graduate Degree33 $24,672 19% 

Source: NCES (2018)

The survey of AmeriCorps alumni (Friedman et al., 2016) provided the percentage of 

members planning to use the education award to attend a vocational/technical 

school (2 percent), college (21 percent), or graduate school (23 percent) 

post-service.34 To determine the future lifetime earnings (and later the associated 

lifetime taxes, which are described in the Benefits to Government section) realized due 

to the use of the education award post-service, the MRC AmeriCorps members who 

32 The education award takes into account whether the AmeriCorps members were full- or part-time and 

were engaged over a full program year or an academic year. In addition, the analysis adjusts the value of 

education awards to dollars in the period studied. For those reasons, education award benefits per person 

may differ across national service programs. 33 Assumes a two-year program. 34 Friedman et al. (2016) found that 79% of members planned on using the education award to repay 

student loans or to pursue additional education.
33 

Return on Investment Study: 

Minnesota Reading Corps—Kindergarten 

served during the most recent program year are distributed by the type of degree 

members plan to attain post-service, as shown in Figure B-6. Then, the difference in the 

additional lifetime earnings from one degree type to the subsequent degree type is 

estimated using data provided by Trostel (2015), which is shown in the fourth column of 

Figure B-6 and expressed in 2019 dollars. For instance, Trostel (2015) calculated that the 

lifetime earnings of someone with an associate degree is about $863,000, while that for 

someone with a bachelor’s degree is over $1.275 million.35 The difference between 

these two metrics (roughly $411,000) represents the additional lifetime earnings realized 

as a result of gaining a bachelor’s degree if an associate degree was already 

completed. This increase in income is then reduced by the percent of the degree 

tuition that can be paid using the education award, such that MRC is only credited for 

the percentage of the benefits equal to the percentage of tuition that the education 

award pays for. This process was completed for three postsecondary degree types to 

conservatively estimate the additional lifetime earnings realized by MRC AmeriCorps 

members due to an increase in educational attainment. 

Next, this amount is applied to the 2019 additional lifetime earnings by degree type to 

calculate the additional lifetime earnings realized by AmeriCorps members from their 

increase in educational attainment that is credited to the use of the education award 

post-service. As noted in Figure B-6, this lifetime earnings amount is roughly $14.1 million 

across all MRC AmeriCorps members who served in the most recent program year. Of 

note, these lifetime earnings are those in addition to the earnings derived from MRC

AmeriCorps members’ gains in employment as delineated in the subsequent section. 

While the earnings from AmeriCorps members’ increased employment differs 

depending on the scenario (i.e., short-term, medium-term, and long-term), the lifetime 

earnings calculated in Figure B-6 are constant across all three scenarios. 

Figure B-6. Additional Earnings from AmeriCorps Members’ Use of the Education Award 

(2019$)

Degree Type

Number of MRC 

AmeriCorps 

Members

Percent of 

Degree Tuition 

Covered by 

Education 

Award (%)

2019 Additional 

Lifetime Earnings 

over Previous 

Educational Step 

($)*

Additional 

Lifetime Earnings 

from Education 

Award ($)

Associate 

Degree 11.1 68% $101,437 $765,534 

Bachelor’s 

Degree 116.2 6% $411,400 $2,636,472 

Graduate 

Degree 127.3 19% $455,221 $10,743,334 

Total 254.6 $14,145,340

Sources: Reading & Math, Inc., Trostel (2015)

35 These amounts were converted to 2019 dollars.
34 

Return on Investment Study: 

Minnesota Reading Corps—Kindergarten 

* Note: This value is the difference of lifetime earnings over the prior degree type (e.g., one with a graduate 

degree can expect to earn $455,221 more over a lifetime than with a bachelor’s degree). 

The improved educational outcomes realized by MRC Kindergarten participants and 

AmeriCorps members also generate benefits to the various levels of government in the 

form of tax revenue generation and cost savings in public assistance, corrections, and 

other forms of government support. A variety of taxes and their associated rates are 

applied to MRC Kindergarten participants’ and AmeriCorps members’ earnings, as well 

as to their estimated spending to determine tax revenue generation. Of note, only the 

difference in cumulative median net earnings for MRC participants and AmeriCorps 

members is used to calculate government benefits in increased tax revenue. Again, this 

difference in cumulative median net earnings for each of these two groups represents 

the increased earnings solely attributable to MRC Kindergarten; thus, the government 

taxes derived from these earnings amounts would also be solely attributable to the 

program. Note that these benefits are only estimated for the estimated 46 percent of 

members who use the education award for additional education post-service.

Additionally, the survey of AmeriCorps members in Friedman et al. (2016) found that 33

percent of members planned to use their education award to pay back student loans. 

Assuming members planned to make payments on their student loans, the education 

award represents an increase in income via a reduction in out-of-pocket student loan 

payments. The number of full-time members (where two half-time members are equal 

to one full-time member) in the most recent MRC service year was calculated and then 

multiplied by 33 percent to identify the estimated number of members using the 

education award in this fashion. Next, this value was multiplied by the value of the posttax education award to calculate the total savings to AmeriCorps members. Again, the 

state and local and federal taxes paid due to the receipt of the education award are 

included as benefits to the respective levels of government. However, cost savings in 

the form of public assistance, corrections, and other forms of government support are 

not included for the subset of AmeriCorps members using the education award to pay 

back student loans.

Reduction in Unemployment due to AmeriCorps Service 

According to Friedman et al. (2016), the percentage of AmeriCorps members 

unemployed was 5 percentage points lower six months after serving in AmeriCorps 

compared to six months before. Friedman et al. (2016) did not provide actual 

employment rates for AmeriCorps members pre- and post-service, but rather provided 

the change in unemployment rates—a 5 percentage point decrease. However, MRC 

AmeriCorps members were older, on average, than the AmeriCorps group included in 

the Friedman study. More than 10 percent of MRC AmeriCorps members were over 65. 

It is likely that a higher proportion of MRC AmeriCorps members are midway in their 

careers or already retired, so it would not be reasonable to assume a 5 percentage 

point change in employment for all MRC AmeriCorps members. To be conservative, the 

analysis assumed that only those under the age of 35 will use their experience at MRC 

to further their career goals. Due to the conservative assumption, this may 

underestimate benefits. Figure B-7 shows the results of applying the 5 percentage point 
35 

Return on Investment Study: 

Minnesota Reading Corps—Kindergarten 

reduction in unemployment weighted by race, gender, and educational attainment of 

the MRC AmeriCorps member. The analysis estimated the earnings of AmeriCorps 

members as a result of their increased employment using educational attainment data 

from the Zeidenberg et al. (2016) study. 

Figure B-7. Additional Number Employed and Annual Median Earnings for AmeriCorps 

Members

AmeriCorps 

Members

Number of 

MRC 

AmeriCorps 

Members 

Age 35 or 

Younger

Percentage 

Point 

Increase in 

AmeriCorps 

Members’ 

Employment 

(%)

Number 

of Members 

with 

Increased 

Earnings 

Attributable 

to 

AmeriCorps

Weighted 

Median 

Gross Annual 

Individual 

Earnings 

(2019$)

Weighted 

Median 

Gross Annual 

Total Earnings 

(2019$)*

[A] [B] [C] = [A] x [B] [D] [E] = [C] x [D]

AmeriCorps 

Members

318 5% 15.9 $52,457 $833,962 

Sources: Zeidenberg et al. (2016), Friedman et al. (2016), U.S. Census Bureau (2018)

* Note: Median net annual earnings excludes payroll taxes paid on earnings (i.e., federal and state income, 

Social Security, and Medicare taxes).

Figure B-8 shows the cumulative median net earnings for the additional AmeriCorps 

members employed for the three different scenarios (i.e., short-term, medium-term, and 

long-term). These post-tax (or net) monetary amounts represent the additional earnings 

realized due to the AmeriCorps members serving in MRC whose employment is solely 

attributed to the program. 

Figure B-8. Cumulative Median Net Earnings for AmeriCorps Members Whose 

Employment Is Attributable to AmeriCorps Participation, Age 35 and Younger, by 

Scenario

Scenario Cumulative Median Net Earnings (2019$)

Short-Term $517,151 

Medium-Term $5,128,466 

Long-Term $6,583,535 

Sources: Zeidenberg et al. (2016), Reading & Math, Inc., U.S. Census Bureau (2018)
36 

Return on Investment Study: 

Minnesota Reading Corps—Kindergarten 

Benefits to Government

State and Local Government

State and local government benefits from MRC Kindergarten are realized through the 

generation of additional state income tax revenue, state and local sales tax revenue, 

and reduced spending on social insurance and corrections due to the increased 

educational attainment of AmeriCorps members post-service. 

State Income Tax Revenue: To measure income tax revenue generation for state 

government (any local income taxes are not included), the additional gross median 

earnings of MRC Kindergarten participants and AmeriCorps members that are solely 

attributed to the MRC program are taxed by a state income tax rate. For MRC 

Kindergarten participants’ additional gross median earnings, the 2019 Minnesota state 

income tax rate is used (7.05 percent), while for AmeriCorps members’ gross median 

earnings, the nationwide average 2019 state income tax rate across the U.S. is used (4.8

percent; Tax Foundation, 2019). See Figure B-9. 

Figure B-9. Annual Additional State Income Tax Revenue

Group

Total Annual 

Additional Earnings

(2019$)

State Income 

Tax Rate* (%)

Annual Additional 

State Income Tax 

Revenue (2019$)

MRC Participants $924,802 7.05% $65,199 

AmeriCorps Members $833,869 4.8% $39,984 

*Minnesota tax rate for MRC participants; average U.S. state income tax rate for AmeriCorps members (Tax 

Foundation, 2019). 

State and Local Sales Tax Revenue: To measure sales tax revenue generation for state 

and local governments, the amount of MRC Kindergarten participants’ and 

AmeriCorps members’ additional median net earnings that are spent on taxable goods 

is taxed by a sales tax rate. For MRC Kindergarten program participants, the summation 

of the 2019 Minnesota state sales tax rate (6.9 percent) and Minnesota’s average local 

sales tax rate (0.5 percent) is used, amounting to 7.4 percent (Tax Foundation, 2019). For 

AmeriCorps members, the nationwide average 2019 combined state and local 

average sales tax rate across the U.S. (6.5 percent) is used. 

To estimate the amount of MRC Kindergarten participants’ and AmeriCorps members’ 

median earnings that is spent on taxable goods, data from the Consumer Expenditure 

Survey are used (BLS, 2018). These data show the amount of spending on a number of 

different goods and services by national consumers across several different income 

brackets. The proportion of earnings that is spent on taxable goods (such as alcoholic 

beverages, housekeeping supplies, apparel, etc.) was then calculated for consumers 

with incomes that matched the earnings of the MRC Kindergarten participants and 

AmeriCorps members; for MRC Kindergarten participants this proportion is 42 percent, 

while for AmeriCorps members it’s 28 percent. The difference is a result of the different 

income brackets MRC Kindergarten participants and AmeriCorps members fall into. 

These proportions are then applied to MRC Kindergarten participants’ and AmeriCorps 
37 

Return on Investment Study: 

Minnesota Reading Corps—Kindergarten 

members’ median net earnings to calculate the post-tax monetary amount they spend 

on taxable goods, and sales tax rates are applied accordingly to estimate the resulting 

sales tax revenues.

Figure B-10 details this process for MRC Kindergarten participants. The same process was 

used to calculate the additional state and local sales tax revenue generated by 

additional earnings and likelihood of employment for AmeriCorps members. However, 

the annual additional earnings and taxable spending rate are allowed to vary by the 

estimated educational attainment levels of AmeriCorps members. In the case of MRC 

Kindergarten participants, all of the benefits are derived only from graduating high 

school. 

Figure B-10. Additional State and Local Sales Tax Revenue, MRC Kindergarten

Participants 

MRC Participants

Total Annual 

Additional Earnings 

(2019$)

Taxable 

Spending Rate (%)

Total Annual Taxable 

Spending (2019$)

Race/Ethnicity Male Female Male Female Male Female

White $368,389 $334,790 43% 53% $157,526 $176,587 

Black $43,380 $35,752 53% 53% $22,881 $18,858 

Hispanic $28,808 $22,501 43% 53% $12,319 $11,868 

Other $51,521 $39,661 43% 53% $22,031 $20,919 

Total Taxable Income Spending $442,988

Total Taxable Income Less Income Taxes36 $324,710

Total Annual State and Local Taxes37 $24,126

Note: Values may not sum due to rounding.

State and Local Government Cost Savings: State and local governments also benefit 

from MRC through lifetime savings in social insurance and corrections—as reported in 

Trostel (2015)—due to the increase in AmeriCorps members’ educational attainment 

after program exit. Of note, social insurance includes unemployment insurance 

compensation and workers’ compensation. To conservatively calculate these lifetime 

non-federal government savings, the pre-national service education levels of 

AmeriCorps members are first compared to their post-national service education levels. 

This determines the change in lifetime costs (and thus savings) in corrections and social 

insurance based on the differences in education levels among MRC AmeriCorps 

members (see Figure B-11). To determine what portion of this differential represents 

lifetime savings to state or local governments versus the federal government, a different 

method is employed for each of these cost savings areas. For social insurance, 

36 Income taxes include an estimated 12 percent federal income tax, a 7.65 percent tax for Social Security 

and Medicare, and a 7.05 percent state and local income tax.

37 Assumes 6.9 percent state sales tax rate and 0.5 percent local sales tax rate.
38 

Return on Investment Study: 

Minnesota Reading Corps—Kindergarten 

50 percent of lifetime unemployment insurance cost savings and all the lifetime cost 

savings for workers’ compensation are apportioned to state and local governments

(Oswald, 2018). Regarding reductions in lifetime corrections spending, the portion 

between the federal and state or local governments is determined based on the U.S. 

incarcerated population in 2019. Specifically, the number of individuals housed in 

federal government institutions (9.7 percent) versus state and local facilities (90.3

percent) was used to divide up these savings (Sawyer & Wagner, 2019). Therefore, over 

90 percent of the lifetime cost savings in corrections, due to AmeriCorps members 

experiencing an increase in educational attainment pre- to post-national service, is 

allocated to state and local governments.

Figure B-11. 2018 State and Local Government Cost Savings

Educational 

Attainment 

Attained

AmeriCorps 

Members 

Using 

Education 

Award

Lifetime 

Unemployment 

Insurance 

Savings (2019$)

Lifetime 

Workers’ 

Comp. 

Savings

(2019$)

Lifetime

Incarceratio

n Savings

(2019$)

Total State 

and Local 

Government 

Savings

(2019$)

Associate 

Degree

11.1 $667 $3,962 $0 $4,629 

Bachelor’s 

Degree

116.2 $6,332 $3,364 $17,996 $27,692 

Graduate 

Degree

127.3 $14,599 ($212) $10,757 $25,144 

Source: Trostel (2015)

Note: Values may not sum due to rounding.

Federal Government 

The federal government benefits from MRC Kindergarten in terms of increased tax 

revenue (e.g., federal income, Social Security, and Medicare taxes) from MRC 

participants’ and AmeriCorps members’ increased additional earnings. It also realizes 

benefits in the form of cost savings in public assistance, social insurance, and 

corrections expenditures due to MRC Kindergarten participants’ improved employment 

and AmeriCorps members’ increased educational attainment post-service. 

Federal Income Tax Revenue: To measure federal income tax revenue, the additional 

median gross earnings of MRC Kindergarten participants and AmeriCorps members 

that are solely attributed to the MRC Kindergarten program are taxed by a federal

income tax rate, based on the estimated median gross annual earnings of MRC 

Kindergarten participants and AmeriCorps members. For MRC Kindergarten

participants, the 2019 federal income tax rate is 12 percent, while for AmeriCorps 

members the rate used is 22 percent. The difference in the federal income tax rates 

stems from their earnings amounts after participating or serving in the MRC 

Kindergarten program, which are associated with different federal income tax 

brackets. 
39 

Return on Investment Study: 

Minnesota Reading Corps—Kindergarten 

Figure B-12. 2018 Annual Additional Federal Income Tax Revenue

Group

Total Annual 

Additional Earnings 

(2019$)

Marginal Federal

Income Tax Rate* 

Annual Additional 

Federal Income Tax 

Revenue (2019$)

MRC Kindergarten 

Participants

$924,802 12% $110,976 

AmeriCorps Members $833,869 22% $183,451 

*Source: IRS (2018) 

Note: Values may not sum due to rounding.

Social Security and Medicare Tax Revenue: Social Security and Medicare tax revenue 

are measured in the same way as the federal income tax but using tax rates specific to 

each revenue source. Social Security and Medicare use flat tax rates, 6.2 percent and 

1.45 percent, respectively; thus, these rates are applied to the additional median gross 

earnings for both MRC Kindergarten participants and AmeriCorps members to 

calculate the amount of revenue the federal government receives. 

Figure B-13. 2018 Annual Additional State Income Tax Revenue

Group

Total Annual 

Additional Earnings 

(2019$)

Social Security and 

Medicare Tax Rate

Annual Additional 

Social Security and 

Medicare Tax 

Revenue (2019$)

MRC Participants $924,802 7.65% $70,747 

AmeriCorps Members $833,869 7.65% $63,791 

Note: Values may not sum due to rounding.

Federal Government Cost Savings: The federal government realizes cost savings in 

public assistance, social insurance, and corrections due to the improved employment 

(and thus increased earnings) of MRC Kindergarten participants as well as the 

increased educational attainment of AmeriCorps members after program exit. In this 

ROI analysis, reductions in public assistance, social insurance, and corrections costs are 

realized for AmeriCorps members, but only reductions in public assistance payments 

are realized for MRC Kindergarten participants; this is because educational attainment 

data for MRC Kindergarten participants were not provided to use the same proxies 

from the Trostel (2015) study as was used for the AmeriCorps members. Thus, though 

both groups experience benefits from the MRC Kindergarten program that result in 

decreases in federal government costs, the sources and methodology used for each 

group slightly differs due to data availability. 

To estimate the savings in public assistance spending that resulted from the 

employment gains of MRC Kindergarten participants post-program participation, data 

from the Consumer Expenditure Survey (specifically for the Midwestern region, which is 

where Minnesota is located) are used (BLS, 2018). Figure B-14 shows the amount of 
40 

Return on Investment Study: 

Minnesota Reading Corps—Kindergarten 

income households receive from the federal government in public assistance (e.g., 

Temporary Assistance for Needy Families, or TANF; Supplemental Nutrition Assistance 

Program, or SNAP; Supplemental Security Income, or SSI; etc.) by income bracket. 

Figure B-14. 2018 Average Annual Public Assistance Payments by Income Range for 

Midwestern Region (2018$)

Payment 

Source

Less

than

$15,000 

($)

$15,000

to

$29,999 

($)

$30,000

to

$39,999 

($)

$40,000

to

$49,999 

($)

$50,000

to

$69,999 

($)

$70,000

to

$99,999 

($)

$100,000

to

$149,999 

($)

$150,000

to

$199,999 

($)

$200,000

and

more ($)

Public 

Assistance 

(TANF, SNAP, 

SSI, etc.)

$1,119 $746 $542 $374 $242 $108 $145 $36 $32

Source: Consumer Expenditure Survey (BLS, 2018) 

In addition to the fiscal cost savings derived from the improved employment and 

earnings of MRC Kindergarten participants, the federal government also spends less on 

AmeriCorps members after the completion of their terms of national service. Using the 

findings of Trostel (2015), which were referenced earlier in this section, the increased 

educational attainment that AmeriCorps members achieve after national service was 

used to estimate the federal government portion of lifetime cost savings on social 

insurance (which is comprised of workers’ compensation and unemployment insurance 

compensation, as noted earlier), public assistance (e.g., SNAP, Medicaid, TANF, etc.), 

and corrections. Figure B-15 shows the lifetime costs to the federal versus to the state 

and local government for each of these areas—where applicable—by education level. 

To conservatively calculate the federal government’s lifetime savings (Figure B-16), the 

pre-national service education levels of AmeriCorps members are first compared to 

their post-national service education levels. The differences between the public 

assistance, federal social insurance, and federal corrections costs for the pre- versus 

post-service education levels represent the cost savings realized by the federal

government due to the increased educational attainment level of an AmeriCorps 

member. As previously mentioned, when discussing the state and local governments’ 

allocation of the reduction in lifetime social insurance and corrections expenditures, the 

federal government receives 50 percent of the lifetime cost savings in unemployment 

insurance compensation (Oswald, 2018), which is part of social insurance, and almost 

10 percent of the lifetime cost savings in corrections (Sawyer & Wagner, 2019). 
41 

Return on Investment Study: 

Minnesota Reading Corps—Kindergarten 

Figure B-15. Benefits to Government of Increased Educational Attainment Level per 

Individual’s Lifetime (2019$)

Source of 

Government 

Saving

High School 

Diploma ($)

Associate 

Degree ($)

Bachelor’s 

Degree ($)

Graduate 

Degree ($)

Public 

Assistance $54,155 $31,803 $14,480 $9,394 

Social Insurance $9,584 $8,209 $5,863 $4,732 

Federal $3,964 $3,570 $2,660 $2,090 

State/Local $5,620 $4,639 $3,204 $2,643 

Corrections $8,488 $4,055 $1,190 $725 

Federal $822 $393 $115 $70 

State/Local $7,666 $3,662 $1,075 $655 

Total $72,227 $44,067 $21,533 $14,851

Sources: Trostel (2015), Sawyer and Wagner (2019)

Figure B-16. 2018 Federal Government Cost Savings

Educational 

Level Attained

AmeriCorps 

Members Using 

Education 

Award

Lifetime 

Unemployment 

Insurance 

Savings (2019$)

Lifetime

Incarceration 

Savings (2019$)

Total Federal

Government 

Savings (2019$)

Associate 

Degree

11.1 $667 $0 $667 

Bachelor’s 

Degree

116.2 $6,332 $301 $6,633 

Graduate 

Degree

127.3 $14,599 $49 $14,648 

Source: Trostel (2015)

Note: Values may not sum due to rounding.

Additional Government Benefits

Increased Federal Income and State and Local Tax Receipts due to a 

5 Percentage Point Reduction in Unemployment Associated with AmeriCorps 

Service 

The analysis estimates AmeriCorps members’ net earnings due to the 5 percentage 

point decrease in unemployment associated with the AmeriCorps member

demographics (in terms of gender, age, race/ethnicity, and educational attainment 

level) of those who served during the most recent program year (Friedman et al., 2016). 

Based on the segmentation of these population characteristics, the analysis estimated 

the number of AmeriCorps members who would gain employment due to the reduced 
42 

Return on Investment Study: 

Minnesota Reading Corps—Kindergarten 

unemployment program benefit. The annual median earnings for the demographic 

multiplied by the estimated number of additionally employed individuals yields an 

estimated annual increase in earnings resulting from the reduction in unemployment 

due to AmeriCorps service. 

Figure B-17 shows the additional earnings of AmeriCorps members; the federal and 

state income, Medicare, and Social Security taxes on the additional income;38 and 

additional sales tax revenue,39 similar to the estimation of the additional MRC 

Kindergarten participants’ income.

Figure B-17. Additional Earnings for MRC AmeriCorps Members and Resulting Public 

Benefits by Scenario (2019$)

Scenario

Gross Additional 

Earnings of MRC 

AmeriCorps Members

(2019$)*

Income Tax 

Payments (2019$)**

Estimated Additional 

Sales Tax Revenue

(2019$)

Short-Term $809,581 $278,861 $13,570 

Medium-Term $8,028,430 $2,765,395 $134,568 

Long-Term $10,306,287 $3,550,004 $172,748 

* Note: Annual earnings estimated in Figure B-13

** Note: Summed federal and state income, Medicare, and Social Security taxes.

Summary of Benefits to Government

Figure B-18 shows the amount of tax revenue generated and savings in expenditures for 

state and local versus the federal government that are solely credited to the MRC 

program’s portion attributable to kindergarten in Minnesota and calculated using the 

methods described above. The data are broken out by MRC Kindergarten participants 

and their AmeriCorps members, for each of the three scenarios. These government 

revenues and savings amounts are benefits that are included in the three ROI 

calculations. 

38 For the increase in employment of AmeriCorps members, the analysis assumes a federal marginal 

income tax rate of 22 percent, an average of all 50 states’ income taxes (4.8 percent), Medicare 

(1.45 percent), and Social Security (6.20 percent). The assumed Minnesota sales tax, state and local, is 

7.43 percent.

39 The average state and local sales tax across the U.S. is estimated to be 6.52 percent.
43 

Return on Investment Study: 

Minnesota Reading Corps—Kindergarten 

Figure B-18. State/Local and Federal Government Benefits by Stakeholder Group and by 

Scenario, Proportional to MRC Kindergarteners

Revenue Source by Stakeholder

Benefit (2019$)

Short-Term

MediumTerm Long-Term

MRC Kindergartener-Derived Benefits

State/Local Government Benefits $8,753,559 $8,925,561 $9,415,968 

State Income Tax Revenue from Employment

(Assumed Minnesota state income tax rate bracket: 

7.05%) 

$0 $125,545 $483,497 

State and Local Sales Tax Revenue from Employment

(Minnesota state and local tax rate: 7.4%)

$0 $46,457 $178,912 

Non-federal Savings Public Economic Benefits 

(including tax payments, health savings, reduced 

crime, welfare savings) from Educational Attainment 

(Lifetime)

$8,753,559 $8,753,559 $8,753,559 

Federal Government Benefits $17,443,910 $17,793,834 $18,791,528 

Federal Income Tax Revenue from Employment

(Assumes the marginal earnings are federally taxed 

at an average rate of 12.0%) 

$0 $213,694 $822,973 

Social Security & Medicare Tax Revenue from 

Employment

(Federal Social Security tax rate: 6.2%) 

(Federal Medicare tax rate: 1.45%) 

$0 $136,230 $524,645 

Federal Savings in Reduced Social Insurance and 

Corrections Spending from Educational Attainment 

(Lifetime)

$17,443,910 $17,443,910 $17,443,910 

AmeriCorps Members-Derived Benefits; Proportional to MRC Kindergarteners

State/Local Government Benefits $637,758 $781,417 $826,747

State Income Tax Revenue from Living Allowances 

and Education Awards*

(Assumed Minnesota state tax bracket: 5.35%)

$145,549 $145,549 $145,549 

State and Local Sales Tax Revenue from Living 

Allowances*

(Average Minnesota state and local tax rate: 7.43%)

$107,985 $107,985 $107,985 

State Income Tax Revenue from Reduced 

Unemployment

(Average state tax rate for assumed marginal 

incomes: 4.8%) 

$11,938 $118,387 $151,976 

State and Local Sales Tax Revenue from Reduced 

Unemployment

(Average state and local tax rate: 6.5%)

$4,173 $41,383 $53,125 

State Income, Sales, and Property Taxes from 

Educational Attainment (Lifetime)**

$350,441 $350,441 $350,441 

Savings in Reduced Social Insurance and 

Corrections Spending from Educational Attainment 

(Lifetime)**

$17,672 $17,672 $17,672 
44 

Return on Investment Study: 

Minnesota Reading Corps—Kindergarten 

Revenue Source by Stakeholder

Benefit (2019$)

Short-Term

MediumTerm Long-Term

Federal Government Benefits $2,021,754 $2,679,978 $2,887,677

Federal Income Tax Revenue from Living Allowances 

and Education Awards*

(Assumed federal income tax rate: 10.0%) 

$272,053 $272,053 $272,053 

Social Security and Medicare Tax Revenue from 

Living Allowances and Education Awards*

(Federal Social Security tax rate: 6.2%) 

(Federal Medicare tax rate: 1.45%) 

$208,121 $208,121 $208,121 

Federal Income Tax Revenue from Reduced 

Unemployment

(Federal income tax rate: 22.0%) 

$54,773 $543,169 $697,278 

Social Security and Medicare Tax Revenue from 

Reduced Unemployment

(Federal Social Security tax rate: 6.2%) 

(Federal Medicare tax rate: 1.45%) 

$19,046 $188,875 $242,463 

Federal Income Tax Revenue from Educational 

Attainment (Lifetime)**

$868,244 $868,244 $868,244 

Social Security Tax Revenue from Educational 

Attainment (Lifetime)**

$509,131 $509,131 $509,131 

Savings in Reduced Social Insurance, Corrections, 

and Public Assistance Spending from Employment 

(Lifetime)**

$90,386 $90,386 $90,386 

Total $28,856,981 $30,180,790 $31,921,920

* Living allowances and education awards are one-time taxable payments. The resulting tax revenue does 

not vary by scenario.

** Applies only to those AmeriCorps members expected to pursue additional education post-service.

The federal and non-federal government estimates of reduced lifetime social 

insurance, corrections, and public assistance spending as well increased lifetime taxes 

due to increased education do not vary across the three scenarios (i.e., short-term, 

medium-term, and long-term) because they are not dependent on how long the 

increased employment and associated earnings are sustained. Rather, they are 

derived from increased educational attainment and that is a lifetime present value. 

Measuring Costs

The analysis’ treatment of costs is discussed on page 12. 

ROI Calculation

The analysis calculated three different ROI results for each scenario. Since two of the 

ROI calculations include benefits to society (program participants and AmeriCorps 

members), the results are expressed as a cost–benefit ratio, while maintaining ROI 
45 

Return on Investment Study: 

Minnesota Reading Corps—Kindergarten 

terminology.40 The ROI (or cost–benefit ratio) in this study can be interpreted as the 

amount of dollars returned for every $1 of investment (or cost). 

The formulas used to calculate each of the three ROIs are shown below: 

= Benefits to MRC Particpants + Benefits to AmeriCorps Members + Benefits to the Goverment

Federal (AmeriCorps) Funding

= Benefits to MRC Particpants + Benefits to AmeriCorps Members + Benefits to the Goverment

Federal (AmeriCorps) Funding + Required Match Funding + Other Funding

= Benefits to the Federal Goverment

Federal (AmeriCorps)Funding

Figures B-19, B-20, and B-21 show the total benefits, costs, and ROI results for each 

scenario. 

Figure B-19. ROI Calculations for Short-Term Scenario (2019$)

Benefits / Costs

Total Benefits 

per Federal Dollar ($)

Total Benefits 

per Funder Dollar ($)

Federal Government 

Benefits 

per Federal Dollar ($)

Total Benefits $34,968,370 $34,968,370 $19,465,664 

Total Costs $3,458,160 $6,398,134 $3,458,160 

Result $10.11 $5.47 $5.63 

40 ROI’s are often expressed as percentages when measuring the financial return to a single entity from that 

entity’s investment. Although this is consistent with one of the three ROI metrics reported (Government 

Revenue/Savings per Federal Dollar), since the other ROIs lend themselves to a cost–benefit ratio, that ratio 

is used for all three metrics. 

Total 

Benefits 

per 

Federal

Dollar

Total 

Benefits 

per 

Funder 

Dollar

Federal 

Government 

Benefits per 

Federal 

Dollar
46 

Return on Investment Study: 

Minnesota Reading Corps—Kindergarten 

Figure B-20. ROI Calculations for Medium-Term Scenario (2019$)

Benefits / Costs

Total Benefits per 

Federal Dollar ($)

Total Benefits per 

Funder Dollar ($)

Federal Government

Benefits per Federal

Dollar ($)

Total Benefits $38,969,135 $38,969,135 $20,473,813

Total Costs $3,458,160 $6,398,134 $3,458,160

Result $11.27 $6.09 $5.92 

Figure B-21. ROI Calculations for Long-Term Scenario (2019$)

Benefits / Costs

Total Benefits 

per Federal Dollar ($)

Total Benefits 

per Funder Dollar ($)

Federal Government 

Benefits per 

Federal Dollar ($)

Total Benefits $44,746,958 $44,746,958 $21,679,205

Total Costs $3,458,160 $6,398,134 $3,458,160

Result $12.94 $6.99 $6.27
47

Return on Investment Study: 

Minnesota Reading Corps—Kindergarten 

References 

AmeriCorps (formerly Corporation for National and Community Service). (2020a). 

Amount, eligibility, and limitations. 

https://www.nationalservice.gov/programs/americorps/segal-americorpseducation-award/amount-eligibility-and

AmeriCorps (formerly Corporation for National and Community Service). (2020b). Tax 

implications. https://www.nationalservice.gov/programs/americorps/segalamericorps-education-award/tax-implications 

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