If the more than 1.2 million U.S. high school dropouts from the Class of 2007 had earned diplomas along with their classmates, the federal government could have collected an additional $60.72 billion in tax revenue over these students’ lifetimes, according to a calculation from the Alliance for Excellent Education. This amount is comparable to the $59.18 billion in discretionary funding that will support the U.S. Department of Education over the fiscal year that began on October 1, 2007.
“Had all of the dropouts from the Class of 2007 received their high school diplomas, they could have contributed enough money in additional tax revenue over the course of their lifetimes to match the amount of discretionary funding that the U.S. Department of Education received for an entire year,” said Bob Wise, president of the Alliance for Excellent Education and former governor of West Virginia. “If that isn’t the best example of how education pays for itself, I don’t know what is.”
The average annual income for a high school dropout in 2005, according to the U.S. Census Bureau, was almost $10,000 less than for a high school graduate. Graduating all students, therefore, increases overall earnings potential, which, in turn, generates higher tax receipts. For example, in a single year the average high school dropout pays $1,302 in federal income taxes compared to $3,085 for a high school graduate.
The number of dropouts was determined by multiplying ninth-grade enrollment data for the 2003–2004 school year (National Center for Educational Statistics 2004) and the high school graduation rate in 2007 (Editorial Projects in Education 2007), which was then multiplied by $48,000—estimated lifetime federal tax liability difference between a high school dropout and a high school graduate (Rouse 2005).
# # #
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. For more information about the Alliance for Excellent Education, please visit www.all4ed.org.