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THE HIGH COST OF HIGH SCHOOL DROPOUTS: Alliance Analysis Pegs Cost of 2006 Dropouts at $309 Billion

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“Although there has been a very slight increase in high school graduation rates, the pace of improvement is glacial compared with the growing and urgent need to ensure that all of our students are prepared for success in the 21st century,” said Bob Wise

If the 1.19 million high school dropouts from the Class of 2006 had earned their diplomas instead of dropping out, the U.S. economy would have seen an additional $309 billion in wages over these students’ lifetimes. So says The High Cost of High School Dropouts: What the Nation Pays for Inadequate High Schools, a new analysis by the Alliance for Excellent Education that was funded by MetLife Foundation. According to the brief, more than 12 million students will drop out of school during the next decade at a cost to the nation of $3 trillion unless high schools start to graduate their students at higher rates.

“Although there has been a very slight increase in high school graduation rates, the pace of improvement is glacial compared with the growing and urgent need to ensure that all of our students are prepared for success in the 21st century,” said Bob Wise, president of the Alliance for Excellent Education and former governor of West Virginia. “As Congress prepares to renew the No Child Left Behind law this year, it must address the continuing hemorrhage of wages and taxes resulting from each class of high school dropouts.”

Research by Cecilia Rouse, professor of economics and public affairs at Princeton University, shows that each dropout, over his or her lifetime, costs the nation approximately $260,000. Using Rouse’s data, the Alliance has calculated the monetary benefits each state could accrue over the lifetimes of just one year’s dropouts if those students could be converted to graduates. The numbers vary from state to state: North Dakota (at the low end) would see its economy increase by $425 million; Alabama (near the middle) would add $3 billion to its economy, and California’s economy (at the high end) would accrue an additional $36 billion over the lifetime of each graduating class.

These figures are conservative and do not take into account the added economic growth generated from each new dollar put into the economy, nor do they account for money saved from reduced spending on social programs. According to the brief, high school dropouts not only drain the nation’s economy by lowering tax revenues, but they also increase the cost of social programs because they are more likely to be teen parents, to commit crimes, and to rely on government health care. In addition, state and local economies suffer further when they have less-educated populaces, as they find it more difficult to attract new business investment.

On the other hand, the brief argues, everyone benefits from increased high school graduation rates. First, the graduates themselves, on average, will earn higher wages and enjoy more comfortable and secure lifestyles. At the same time, the nation benefits from graduates’ increased purchasing power, collecting higher tax receipts and seeing higher levels of worker productivity.

The complete analysis, as well as a state-by-state breakdown for all fifty states and the District of Columbia, is available here

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Every Child a Graduate. Every Child Prepared for Life.