The cost-trends of supported employment versus sheltered employment

Abstract. This study investigated the cost-trends of supported and sheltered employees with mental retardation as they completedone “employment cycle” (i.e., from the point they entered their programs to the point when they changed their jobs, left theirprogram, or otherwise stopped receiving services). Data indicate that the cumulative costs generated by supported employeesare much lower than the cumulative costs generated by sheltered employees ($6,618 versus $19,388). Further the cost-trend ofsupported employees was downward while the cost-trend of sheltered employees was slightly upward, indicating that the costsof supported employment decline over time while those of sheltered workshops increase.Keywords: Supported employment, sheltered employment, cost-trends, cumulative costs 1. IntroductionThroughout the vocational rehabilitation literature,many authors have claimed that supported employ-ment is a better investment for taxpayers than shel-tered workshops (cf. [3,4,11,12,16–20,22]). These as-sertions are corroborated by wealth of data from overtwenty cost-effectiveness and cost-efﬁciency studiescompleted since the early 1980s [5,7,13]. In gener-al, these studies have found that over time supportedemployment generates fewer costs than do shelteredworkshops.However, the longitudinal projections arrived at bymany of these studies are often based upon the premisethat the costs of supported employment decreases overtimewhilethecostsofshelteredworkshopsremaincon-stant [9,20,21]. Intuitively, this premise makes sense.After all, as a job coach begins to fade from a worksite,the cost of services that that job coachprovidewill alsodecrease. Thus, it is very possible that, if a supportedemployee becomes completely independent from jobcoach intervention and supervision, the programmat-ic costs generated by that supported employee will beclose to zero.Sheltered employees, on the other hand, tend to besupervisedconstantly[2,23]. Further,foreverybillableunit of time a sheltered employee is being supervised,supervisors are able to charge funding sources for theirservices [6,8]. Therefore, sheltered employees can-not remain in the workshop without generating at leastsome costs. In fact, the costs generated by shelteredemployees should remain relatively constant from theﬁrst day in their program to the last, if the number ofhourstheyworkintheworkshopalso remainsconstant.Although this premise seems logically sound, it hasnot been veriﬁed by actual data. In fact, of the morethan twenty studies that have examined the costs ofsupported employment and sheltered workshops, nonehave demonstrated that the costs generated by indi-vidual supported employees decrease throughout theirtenure while the costs generated by sheltered employ-ees remain constant. If these cost-trends do not exist,the projected longitudinal analyses presented by otherauthors (cf. [6,20])are not accurate. Moreover,if theseprojections are not accurate, it may be that supportedemployment isn’t the best investment in the long-termfor taxpayers after all.The purpose of the present study is to explore thecost-trendsofagroupofsupportedemployeesandshel-teredemployeesastheycompleteone“employmentcy-cle” (i.e., from in-take to leaving their program, chang-ing jobs within the community, or otherwise stopped