The National Institute for Economic and Social Research (NIESR) are presenting their findings this week to the Royal Economic Society (RES) conference.
Tessa Jowell said: 'This government was elected on a commitment to put an end to long-term youth unemployment as a matter of national priority - and with over 216,000 young people already helped into work through the New Deal we are well on the way to doing that.
'However, this has been achieved by hard choices and sustained investment in a generation of young people, many of whom face substantial disadvantage in looking for jobs. We always believed that the up front investment the New Deal required would be one of the wisest any government could make. But these early findings from independent professional researchers suggest the New Deal has been a resounding success.
'A further preliminary and encouraging finding is that its benefits are so substantial that the cost of New Deal to the public purse in the first two years is likely to have been small.
'This suggests that the gains from New Deal in terms of benefits not paid out and extra taxes paid in are closer to the costs of operating the programme in these first two years.
'All the good the New Deal has done - all the young people for whom it has provided more confidence, better skills, jobs - has been achieved at little net cost to the country.'