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THE GRADUATION EFFECT: Increasing National High School Graduation Rate Key to Job Creation and Economic Growth, New Alliance Analysis Finds

“For the short-term impact on the nation’s economy, the Federal Reserve’s raising of interest rates has generated a lot of attention, but over the long term, rising graduation rates are much more important for the nation’s economy," said Gov. Wise.

New data from the Alliance for Excellent Education demonstrates how graduating more students from high school creates new jobs, increases consumer spending, boosts tax revenues, and increases the gross domestic product. This “Graduation Effect” data is available for the United States as a whole, all fifty states and the District of Columbia, and more than 200 metro areas nationwide at

“The two areas of rising rates getting major attention are the Federal Reserve and the high school graduation rates,” said Bob Wise, president of the Alliance and former governor of West Virginia. “For the short-term impact on the nation’s economy, the Federal Reserve’s raising of interest rates has generated a lot of attention, but over the long term, rising graduation rates are much more important for the nation’s economy.”

The national high school graduation rate is at an all-time high, but one in five students still fails to earn a diploma on time. Increasing the national high school graduation rate to 90 percent would likely have the following positive effects on the national economy:

  • Create 65,150 new jobs
  • Boost gross domestic product by $11.5 billion annually
  • Increase annual earnings by $7.2 billion
  • Increase annual spending by $5.3 billion
  • Increase federal tax revenue by $1.1 billion

To put human faces on the economic gains associated with higher high school graduation rates, the Alliance is partnering with Communities in Schools (CIS), a nonprofit organization working to keep kids in school, to feature young people who overcame personal and educational challenges in their pursuit of a high school diploma.

“The struggle of not having a high school diploma isn’t something I saw in a movie or read in a book. They were friends of mine. They were my parents,” says San Antonio City Councilman Rey Saldaña, who earned his diploma, graduated Stanford University, and became the youngest elected city councilman in San Antonio’s history. “The best part of my job is when I get to talk to students and provide to them a role model of somebody who looks like them, who came from their neighborhood, and who is now an example they can use … and it all began with a high school diploma.”

Additional stories come from Talitha Halley, who relocated with her family to Houston, Texas, after Hurricane Katrina made her and her family refugees, and Jamal Tate, who had several run-ins with the law and served jail time during his senior year of high school but graduated from high school and college.

“The effects of poverty on today’s youth are staggering, and now impact a majority—51 percent—of our nation’s students,” says CIS president Dan Cardinali. “Given the enormous economic and social implications of the dropout crisis, we simply can’t afford to settle for an 80 percent graduation rate, especially when we already have proven solutions that are working for millions of low-income kids. We must focus on what is proven to work, like the Communities in Schools model, and take these methods to scale. This important study from the Alliance shows that delivering effective supports to our neediest students will have lasting, positive economic rewards that our country desperately needs.”

In December, the Alliance hosted a video webinar examining these economic findings in more detail, as well as how to ensure that more students stay in school and earn their high school diploma. It featured Wise, Saldaña, Cardinali, and Cheryl Oldham, vice president of education and workforce at the U.S. Chamber of Commerce Foundation.

Impact Webinar

“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. “Still, it is important to remember that a high school diploma is not an end point, but a jumping off point to greater things—college, a career, or additional training—that benefit the individual. And as these findings show, the rest of us will benefit as well.”

The Graduation Effect, which is made possible through generous support from State Farm®, builds on the Alliance’s previous work connecting improved education outcomes to economic benefits.

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


Economic Impacts

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Every Child a Graduate. Every Child Prepared for Life.