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High School Dropouts Cost the U.S. Billions in Lost Wages and Taxes, According to Alliance for Excellent Education

Press Release:

High School Dropouts Cost the U.S. Billions in Lost Wages and Taxes, According to Alliance for Excellent Education

Almost 1.3 million students didn’t graduate from U.S. high schools in 2004, costing the nation more than $325 billion in lost wages, taxes, and productivity over their lifetimes, reports the Alliance for Excellent Education. (A chart showing the losses over a lifetime to each state and the District of Columbia can be found below this press release).

“This is a very conservative estimate,” said Alliance president and former governor of West Virginia Bob Wise. “There’s so much that it doesn’t include – like the much higher earnings that would be realized if some of the kids not only got their high school diploma but also went on to college. Nor does it take into account the losses related to dropouts from previous or future years.”

Students who don’t graduate earn less than their classmates who get at least a high school diploma, and considerably less than those with a college degree. Said Wise: “These losses in earnings are bad for the individual, obviously, but they also have a tremendously negative impact on the nation’s economy.”

Although states regularly report higher graduation rates, reliable research has shown that nationally, only about two-thirds of the students who enter 9th grade will graduate with a regular diploma four or five years later.

The Alliance’s analysis is based on a recent report by Princeton University researcher Cecilia Rouse, which noted that “those who do not complete high school are less likely to be employed and have significantly lower annual earnings than those with at least a high school degree, (and) they also contribute significantly less to tax revenues.” Rouse estimates that the lifetime difference in income between a high school graduate and a dropout is about $260,000. To calculate the figures for each state, the Alliance multiplied the number of students reported by the Urban Institute as not having graduated on time in 2004 (the last year for which figures are available) by $260,000.

The Alliance for Excellent Education is a Washington-based policy, research, and advocacy organization that works to make every child a graduate, prepared for postsecondary education and success in life. It is funded by the Leeds Family, the Bill & Melinda Gates Foundation, Carnegie Corporation of New York, the Daniels Fund, and the New York Community Trust, as well as by concerned individuals.

 

Lost Earnings for Dropouts

State
9th Grade (2000-01) All Students (#)
Graduation Rate (%)
Non-Graduates
in 2004
Lost Lifetime Earnings
($260,000 per dropout)*
AL
60,245
61.4
23,255
$6,046,300,000
AK
11,348
64.2
4,063
$1,056,380,000
AZ
70,124
67.3
22,931
$5,962,060,000
AR
36,055
70.5
10,636
$2,765,360,000
CA
476,142
68.9
148,080
$38,500,800,000
CO
61,097
69.0
18,940
$4,924,400,000
CT
40,423
77.0
9,297
$2,417,220,000
DE
10,366
64.3
3,701
$962,260,000
DC
4,207
65.2
1,464
$380,640,000
FL
238,161
53.0
111,936
$29,103,360,000
GA
126,793
55.5
56,423
$14,669,980,000
HI
15,915
66.0
5,411
$1,406,860,000
ID
19,471
79.6
3,972
$1,032,720,000
IL
163,806
75.0
40,952
$10,647,520,000
IN
79,825
72.4
22,032
$5,728,320,000
IA
40,660
78.2
8,864
$2,304,640,000
KS
38,780
74.1
10,044
$2,611,440,000
KY
54,187
65.3
18,803
$4,888,780,000
LA
53,879
64.5
19,127
$4,973,020,000
ME
17,134
72.1
4,780
$1,242,800,000
MD
71,705
75.3
17,711
$4,604,860,000
MA
59,213
71.0
17,172
$4,464,720,000
MI
142,663
74.0
37,092
$9,643,920,000
MN
70,236
78.9
14,820
$3,853,200,000
MS
39,386
58.0
16,542
$4,300,920,000
MO
75,173
72.9
20,372
$5,296,720,000
MT
13,321
77.1
3,051
$793,260,000
NE
24,122
77.3
5,476
$1,423,760,000
NV
29,972
54.7
13,577
$3,530,020,000
NH
17,578
73.9
4,588
$1,192,880,000
NJ
95,228
86.3
13,046
$3,391,960,000
NM
28,944
61.2
11,230
$2,919,800,000
NY
245,311
61.4
94,690
$24,619,400,000
NC
111,745
63.5
40,787
$10,604,620,000
ND
9,204
79.5
1,887
$490,620,000
OH
159,724
70.7
46,799
$12,167,740,000
OK
49,667
69.8
14,999
$3,899,740,000
OR
44,574
73.6
11,768
$3,059,680,000
PA
153,523
75.5
37,613
$9,779,380,000
RI
12,557
73.5
3,328
$865,280,000
SC
63,776
50.7
31,442
$8,174,920,000
SD
10,920
79.4
2,250
$585,000,000
TN
73,141
57.5
31,085
$8,082,100,000
TX
355,019
65.0
124,257
$32,306,820,000
UT
35,538
78.3
7,712
$2,005,120,000
VT
8,594
77.9
1,899
$493,740,000
VA
98,062
73.8
25,692
$6,679,920,000
WA
87,238
62.6
32,627
$8,483,020,000
WV
23,592
70.7
6,912
$1,797,120,000
WI
77,683
78.2
16,935
$4,403,100,000
WY
7,711
72.4
2,218
$553,280,000
Nation
3,913,738
68.0
1,252,396
$325,622,960,000

Source: Projections of 2003-04 High School Graduates: Supplemental Analyses based on findings from Who Graduates? Who Doesn’t? A Statistical Portrait of Public High School Graduation (Table 1) Washington, D.C.: The Urban Institute, 2004. Available at http://www.urban.org/url.cfm?ID=411019.

*Earnings estimation based on calculations in “Labor Market Consequences of an Inadequate Education” by Rouse, Cecilia E. (2005) Paper prepared for the symposium on The Social Costs of Inadequate Education, Teachers College Columbia University, Oct. 2005.

Categories: High School Dropout Rates

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