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THE HIGH COST OF HIGH SCHOOL DROPOUTS: New Alliance Brief Says Dropouts from the Class of 2009 Represent $335 Billion in Lost Income

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"Given the state of high schools in the United States, it is imperative that the nation focus attention on students most at risk of dropping out if it is to achieve long-term economic stability. In an Information Age economy, education is the main currency."

If the high school students who dropped out of the Class of 2009 had graduated, the nation’s economy would have benefited from nearly $335 billion in additional income over the course of their lifetimes. So says The High Cost of High School Dropouts: What the Nation Pays for Inadequate High Schools, a new issue brief from the Alliance for Excellent Education.

“As these findings show, 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. “Given the state of high schools in the United States, it is imperative that the nation focus attention on students most at risk of dropping out if it is to achieve long-term economic stability. In an Information Age economy, education is the main currency.”

Not only do high school dropouts earn less when they are employed, but they are also much more likely to be unemployed during the current economic recession, the brief finds. As shown in the graph below, the unemployment rate for individuals of all education levels has skyrocketed since the recession began in December 2007, but high school dropouts have faced the most difficulty in finding a job. In July 2009, the unemployment rate for high school dropouts 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 those with a bachelor’s degree or higher.

high cost of hs drop

Source: Bureau of Labor Statistics, Table A-4: Employment Status of the Civilian Population 25 Years and Over by Educational Attainment, http://www.bls.gov/news.release/empsit.t04.htm (accessed August 10, 2009).

Using data from the U.S. Census Bureau, the brief notes that the average annual income for a high school dropout in 2005 was $17,299, compared to $26,933 for a high school graduate, a difference of $9,634. The impact on the country’s economy is less visible, but as the brief demonstrates, cumulatively its effect is staggering.

“The results speak clearly,” Wise said. “In this economy, being without a high school diploma is two strikes-you are more likely to make less, and if you have a job, you are more likely to be laid off from it.”

More than seven thousand students become dropouts every school day. Annually, that adds up to almost 1.3 million students who will not graduate from high school with their peers as scheduled. According to the brief, if high schools are unable to graduate their students at higher rates, nearly 13 million students will drop out over the next decade. The result will be a loss to the nation of $3 trillion.

On the other hand, everyone benefits from increased high school graduation rates, the brief argues. Graduates themselves, on average, will earn higher wages and enjoy more comfortable and secure lifestyles. They live longer, are less likely to be teen parents, and are less likely to commit crimes, rely on government health care, or use other public services such as food stamps or housing assistance. At the same time, the nation benefits from graduates’ increased purchasing power, collects higher tax receipts, and sees higher levels of worker productivity.

“From the implementation of the stimulus bill, to the federal budget and the reauthorization of the Elementary and Secondary Education Act, the Congress has several opportunities to fix the nation’s high schools,” Wise said. “I urge quick congressional action to address the high school dropout crisis and ensure that more students graduate from high school prepared for college and career.”

The High Cost of High School Dropouts: What the Nation Pays for Inadequate High Schools is available here. It was originally published in 2007 with support from MetLife Foundation.

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