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DROPOUTS, DIPLOMAS, AND DOLLARS: Alliance Report Estimates Current Cost of Dropouts and Future Impact if Status Quo Continues

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“The stunning potential economic benefit to the nation and the states of improving outcomes for academically underserved youth through improved schooling should be a wake-up call.”

The United States can no longer absorb the costs and losses associated with an education system that already produces more than 1.2 million dropouts every year. So says Dropouts, Diplomas, and Dollars: U.S. High Schools and the Nation’s Economy, another new report from the Alliance for Excellent Education, which declares that the situation in America’s high schools is “nothing short of a crisis” but is “largely ignored by the media and the public.” The report seeks to help all Americans—whether they have a direct connection with schools or not—understand their personal stake in ensuring that every child becomes a high school graduate, prepared for success in college, the modern workplace, and life.

According to the report, students’ chances of graduating from high school vary widely depending on where students go to school, their gender, and their racial and ethnic background. For example, the report notes a wide variation in national graduation rates for African American, Hispanic, and American Indian students, who tend to have much lower rates than their white or Asian American peers. However, these discrepancies are even larger at the state level. In Iowa, for instance, white students graduate at a rate of 84.8 percent, whereas African American (58.6 percent) and Hispanic (54 percent) students trail by more than 25 percentage points. The report describes similar graduation rate gaps across counties and within cities and school districts.

Fifty years ago, the United States could afford to lose large numbers of students before graduation because those dropouts could still land well-paying jobs and support their families. Today, however, individuals who fail to earn a high school diploma are at a great disadvantage when it comes to finding a good-paying job because many of the jobs once open to high school dropouts have moved overseas or have become automated.

Additionally, many of the manufacturing jobs that once offered attractive options for high school dropouts now require increasingly higher levels of education and training. For example, the report notes that whereas only 12 percent of manufacturing workers had any college education in 1973, that number is now more than 36 percent. Without attractive options for employment, high school dropouts often turn to other options such as unemployment benefits, social welfare assistance, and even crime.

The report lists many other disadvantages that high school dropouts face compared to individuals who receive a diploma. For example, it notes that dropouts are generally less healthy, die earlier, and are more likely to become parents when very young. According to the report, even more tragic, the children of high school dropouts are more likely to become high school dropouts themselves, as are their children’s children, and so on.

Clearly, the dropouts themselves suffer the most direct impact. But the report demonstrates that the economy, social fabric, and security of the nation, states, and local communities are also affected. The opportunities that these youths will miss throughout their lives will have cumulative costs for them as individuals and also represent a significant lost opportunity for the country. According to the report, a single high school dropout costs the nation approximately $260,000 in lost earnings, taxes, and productivity over the course of his or her lifetime. So, if the students who dropped out of the Class of 2008 had graduated, the nation’s economy would have benefited from an additional $319 billion in income over their lifetimes. The report includes additional savings from decreased spending on crime, health care, and college remediation.

Looking ahead, the report finds that the challenge associated with high school dropouts is unlikely to diminish. “The world will continue to change, and good jobs will require even higher levels of education,” it reads. “And the retirement of the baby boom generation will create even more demand for new well-educated candidates to replace them in the workforce.”

Another factor that the report says will influence the future of the nation’s economy is the country’s increasing racial and ethnic diversity. It notes that, in the coming decades, the labor force is expected to become even more diverse than it is now, as minorities, with higher population growth through immigration, higher fertility rates, and higher labor force participation rates, are projected to expand their proportion of the workforce considerably.

But currently, only 57.8 percent of Hispanic, 55.3 percent of African American, and 50.6 percent of Native American students graduate on time, compared to 77.6 percent of white students. If minority groups continue to grow larger as a percentage of the population, as predicted, and if their low graduation rates remain the same, the report finds that the national graduation rate will begin to fall as a growing number of minority students are left behind. Already, minority students account for more than half of the nation’s dropouts even though they make up less than half of the nation’s total public school population.

On the other hand, the report says that if high schools and colleges were able to raise the graduation rates of Hispanic, African American, and Native American students to the levels of white students by 2020, the potential increase in personal income across the nation would add, conservatively, more than $310 billion to the U.S. economy.

“The stunning potential economic benefit to the nation and the states of improving outcomes for academically underserved youth through improved schooling should be a wake-up call,” the report reads. “The importance of reforming America’s high schools cannot be understated; the nation truly needs the economic and social contributions these young people can make. The realities of global competitiveness, the rapidly diminishing prospects of those students whose high schools fail to prepare them for college and work, and the resulting widening opportunity gap all make high school reform an imperative from an economic, national security, and civil rights perspective.”

The complete report is available here

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Every Child a Graduate. Every Child Prepared for Life.