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THE CONSEQUENCES OF DROPPING OUT OF HIGH SCHOOL: Average High School Dropout Has a Negative Net Fiscal Contribution to Society of $5,200, Says New Report

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"Given the current and projected deficits of the federal government, the fiscal burden of supporting dropouts and their families is no longer sustainable."

NOTE: The data in the article below is fairly outdated. For more recent data on the consequences of dropping out of high school, please refer to our more recent article, “The High Cost of High School Dropouts.”

According to data from the Bureau of Labor Statistics, high school dropouts are having a harder time finding and keeping jobs than individuals with higher levels of education. In fact, the national unemployment rate for high school dropouts in July 2009 was 15.4 percent, compared to 9.4 percent for high school graduates, 7.9 percent for individuals with some college credits or an associate’s degree, and 4.7 percent for individuals with a bachelor’s degree or higher.

However, a new report from the Center for Labor Market Studies at Northeastern University finds that young adult high school dropouts-individuals aged sixteen to twenty-four-face even more difficulty in the labor market. The report, The Consequences of Dropping Out of High School: Joblessness and Jailing for High School Dropouts and the High Cost for Taxpayers, also examines other problems such as lower earnings and higher incarceration rates that affect young adult dropouts more disproportionately than their better-educated peers. It concludes that the average high school dropout will have a negative net fiscal contribution to society of nearly $5,200, while the average high school graduate generates a positive lifetime net fiscal contribution of $287,000 from age eighteen to sixty-four.

According to the report, young high school dropouts are much less likely to be active labor force participants than their higher-educated peers and frequently experience considerably higher unemployment rates when they do seek work. As noted in the chart below, on average, approximately 54 percent of the nation’s young high school dropouts were unemployed in 2008, compared to nearly 32 percent of young high school graduates-a difference of more than 22 percentage points.

the consequences

The report also breaks out unemployment rates by various subgroups and finds large differences. For example, young black high school dropouts, with a 68.6 unemployment rate, were most likely to be without a job, compared to 53.9 percent of young white dropouts and 46.9 percent of young Hispanic dropouts. The report attributes the below average unemployment rates of Hispanic dropouts to the significantly higher employment rates of young Hispanic immigrants, many of whom are undocumented immigrants. It notes that previous research has found that higher levels of new immigration in a state tend to significantly reduce the employment rates of the nation’s teens and young adults, especially males, non-college-educated youth, and native-born black and Hispanic males with limited postsecondary schooling.

Because young high school dropouts were less likely to be employed and more likely to earn lower wages when employed, their mean annual earnings were only $8,358 in 2007, compared to more than $14,500 for young high school graduates, nearly $18,300 for individuals with some college, and approximately $24,800 for their peers with a bachelor’s degree or higher. The report notes that the earning power of male high school dropouts has “declined considerably” over the past few decades, “reducing their marriage rates, home ownership rates, and their fiscal contributions to federal, state, and local governments.”

Citing the 2006 and 2007 American Community Surveys (ACS), the report finds strong links between educational attainment and teen and young adult parenting. According to the ACS, 13.5 percent of the 18.6 million women ages sixteen to twenty-four had given birth to one or more offspring at the time of the survey. It also finds that the share of women who were mothers varied quite considerably across education attainment, with young female dropouts six times as likely to have given birth as compared to their peers who were college students or four-year college graduates.

Specifically, 37.8 percent of female high school dropouts aged sixteen to twenty-four were mothers, compared to 29.8 percent of high school graduates, and 6.4 percent of bachelor’s degree recipients. Overall, 8 percent of the women in the study were single mothers, but high school dropouts (23 percent) were nearly nine times more likely to become single mothers than women with bachelor’s degrees (2.6 percent).

The report also relies on 2006 and 2007 ACS surveys to determine the percentage of sixteen- to twenty-four-year-olds in selected educational attainment groups who were in correctional facilities. It finds that while only 0.1 percent of young bachelor’s degree recipients and 1 percent of high school graduates were institutionalized, 6.3 percent of high school dropouts were institutionalized.1 After breaking out data for young males, the report finds that “nearly 1 of every 10 young male high school dropouts was institutionalized on a given day in 2006-2007 versus fewer than 1 of 33 high school graduates. Young black males were especially affected-23 percent of sixteen- to twenty-four-year-old black male high school dropouts were incarcerated in 2006-207, compared to 6.1 percent of Hispanics, 6.6 percent of whites, and 7.2 percent of Asians.”

The report examines tax revenues, incarceration costs, and other economic factors to determine that the average high school dropout will have a negative net fiscal contribution to society of nearly $5,200 over his or her working lifetime, compared to a positive lifetime net fiscal contribution of $287,000 for the average high school graduate. “Adult dropouts in the U.S. in recent years have been a major fiscal burden to the rest of society,” the report reads. “Given the current and projected deficits of the federal government, the fiscal burden of supporting dropouts and their families is no longer sustainable.”

Read the complete report at http://tinyurl.com/yzga2c9.

1 According to the report, the U.S. Census Bureau does not identify the specific type of institution in which an individual was housed at the time of the ACS survey. A small fraction of institutionalized young adults were living in long-term health care facilities (nursing homes, mental hospitals), but the vast majority (93 percent) were residing in adult correctional institutions and juvenile detention facilities.

2 Comments

  1. photo
    ntshireletsa
    Posted 2 years ago

    this stats are very shocking and i just wish that our society can work with the government to deal with high school dropouts.i am currently working on a reseach focused on the high school dropouts and i find this information very useful,and i hope to change the mindset of some of my community members who happens to falls in this statistics.thank you very much!

  2. photo
    Caitlin Burney
    Posted 2 weeks ago

    This is a good site to read because it tells why people shouldn’t dropout of high school…I’m only 13 but I got in trouble so my grandma made me write down HOW DROPPING OUT OF HIGHSCHOOL AFFECTS YOUR LIFE? so I wrote it all down I actually liked writing all of this down because 1.It gives me something to do here at home…
    But I liked reading it I enjoyed it because it helped me realize I need to be more responsible with my choices and I need to bring the bad grades that I have right now up to atleast A’s B’s or C’s I have 2 A’s 2 B’s 1 D and 2 F’s I’m bringing all three of those bad grades up to good grades because I now realize that if I don’t get an education and a job when I’m older and stuff I wont SUCCEED IN LIFE………..

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