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EDUCATION AND THE ECONOMY: New Alliance Economic Analysis Links Increased Educational Attainment to Economic Growth in 200+ Metro Areas

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Increasing the national high school graduation rate to 90 percent for just one high school class would create as many as 65,700 new jobs and boost the national economy by as much as $10.9 billion.

With all eyes on the economy this month, new findings from the Alliance for Excellent Education further cement the connection between improved education outcomes and economic gains at the national, state, and local levels. According to the detailed analysis, increasing the national high school graduation rate to 90 percent for just one high school class would create as many as 65,700 new jobs and boost the national economy by as much as $10.9 billion. The nation would also see increases in home and automobile sales of as much as $16.8 billion and $877 million, respectively, and an annual increase in federal and state tax revenues of as much as $1.3 billion and $661 million, respectively.

These findings and more have been infused into a sophisticated and highly interactive map-based website, impact.all4ed.org. The website combines the latest education data on high school and college graduation rates, college preparedness data, literacy, employment, and more to demonstrate the economic impact of increasing the high school graduation rate to 90 percent for the nation as a whole, all fifty states and the District of Columbia, and more than 200 metro areas. The metro areas included in the analysis are indicated with an orange dot in the map below.

More than 200 metro areas are included in the Alliance's economic analysis.

More than 200 metro areas are included in the Alliance’s economic analysis. Click on the map for a larger image.

“During this time of economic uncertainty, the best economic stimulus is a high school diploma,” said Bob Wise, president of the Alliance for Excellent Education and former governor of West Virginia. “Individuals who graduate from high school help themselves in the form of increased earnings and better life outcomes, but they also help boost national, state, and local economies.”

In addition to the projected benefits listed above, the national economy is already expected to receive an additional $17.3 billion dollars in income from recent increases in the high school graduation rate between the 2010–11 and 2011–12 school years.

“All the hard work to raise high school graduation rates in recent years has a definite positive dollars-and-cents impact,” Wise said.

This work, which was made possible through generous support from State Farm®, builds on the Alliance’s previous work linking education and the economy and provides clear evidence that education is the only currency in an information-age economy.

“The Alliance’s findings make clear that jobs, our economy, and education are inextricably linked,” said Edward B. Rust Jr., chairman and chief executive officer of State Farm®. “Today’s students will become a significant portion of our future workforce. Ensuring that each one has access to a high-quality education is not just the right thing to do; it’s also the smart thing—both for the individual and the economy.”

“Compared to high school dropouts, high school graduates are less likely to be unemployed, less likely to tangle with the criminal justice system, and more likely to have positive life outcomes, including better health and a longer life span,” said Wise. “But as these findings show, the individual isn’t the only one who benefits—we all do.”

The Alliance calculated the economic impacts associated with increased high school graduation rates by analyzing state economies through a sophisticated economic input-output model created by Economic Modeling Specialists Inc., an Idaho-based economic firm specializing in socioeconomic impact tools.

The findings are based on the most current economic data available from sources including the U.S. Census Bureau and the U.S. Bureau of Labor Statistics and are comparable to results from similar studies that forecast the economic impact of education at the state and national levels.

Dropout data included in the model for each state were calculated by Editorial Projects in Education’s Research Center using the Cumulative Promotion Index (CPI) method. The CPI was used in this analysis because it is the most readily available method that allows for a universal comparison of graduation counts across school districts and states.

Visit impact.all4ed.org to explore the findings and see additional information, including technical notes and frequently asked questions.

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