New Economic Analysis Shows Economic Benefits of Cutting the High School Dropout Rate and Boosting Participation in Postsecondary Education Among Most-at-Risk Students
WASHINGTON, DC – Cutting the nation’s high school dropout rate in half would have tremendous benefits for the economy. But as a new economic analysis released today by the Alliance for Excellent Education shows, cutting the dropout rate in half and ensuring that those “new graduates” meet national goals for postsecondary attainment creates new jobs, increases earnings for individuals, and boosts states’ tax revenues.
“Just crossing the finish line and earning a high school diploma is no longer enough in today’s global economy,” said Bob Wise, president of the Alliance for Excellent Education and former governor of West Virginia. “Today, a high school diploma must be the jumping-off point-the ticket to the additional education students need to compete for and land good-paying jobs.”
The likely benefits for cutting the nation’s dropout rate in half for one class of dropouts would be tremendous, including as much as $5.3 billion in increased earnings for individuals, 37,700 new jobs, and a $6.7 billion increase in the gross domestic product. At the same time, however, the Alliance discovered that only 27 percent of the nation’s “new graduates” would likely go on to earn a college credential or degree. Specifically, 14 percent would earn a vocational certificate, 9 percent would earn a two-year degree, and only 4 percent would earn a four-year degree.
“These postsecondary completion rates signal that the barriers facing students in high school do not simply disappear when they earn a diploma,” Wise said. “K-12 and higher education must come together to offer a continuous stream of support for these students, including programs to help them get back on track to earning a high school diploma that prepares them for college, and efforts by postsecondary institutions to help students persist through completion.”
Today’s analysis demonstrates the economic benefits if 60 percent of the Class of 2010’s “new graduates” had gone on to earn a college credential or degree. Of that 60 percent goal, the Alliance’s analysis includes the economic benefits if 32 percent of new graduates had earned a vocational certificate, 20 percent had earned a two-year degree, and 8 percent had earned a four-year degree. The resulting economic impacts would likely include
- $8.8 billion in additional earnings-an increase of $3.5 billion; and
- $6.4 billion in increased spending-an increase of $2.2 billion.
This additional money is not going under a mattress-it will be put to good use by purchasing homes, automobiles, groceries, clothing, and more. The additional spending that those new graduates could do with their earnings would be enough to support as many as 63,000 new jobs and increase the gross domestic product by as much as $11 billion, the study finds. This increased economic activity would likely result in $825 million in increased state tax revenue during a time when nearly every state’s budget is in dire straits.
“These economic benefits are for just one class of high school dropouts,” said Wise. “If the nation could boost educational outcomes for each high school class over the next decade, the economic return would be tenfold.”
The data released today was derived from a sophisticated economic model that the Alliance, with generous support from State Farm®, developed with Economic Modeling Specialists Inc., an economics firm specializing in socioeconomic impact tools.
“As a business leader I’m committed to a quality education for all children and to strengthening the vitality of our communities,” said Edward B. Rust Jr., chairman and chief executive officer of State Farm®. “The new findings from the Alliance for Excellent Education conclusively demonstrate that graduating from high school and going on to postsecondary education has significant positive economic and financial benefits for the business community and not just for the individual getting the education. We must assure that all of our students graduate from high school with the skills necessary to succeed in college and a career. This is clearly something all businesses-small and large-and all community citizens should see as a priority.”
The goal of this economic analysis is to show every American how improving the educational outcomes of the nation’s students directly impact his or her bottom line.
“Put simply, everyone wins-the individual student, the bank branch manager, the new car salesman, the department store worker, etc.-when more students graduate from high school and complete some form of postsecondary education,” Wise said. “It’s what today’s students need and what today’s employers demand.”
The complete results from the Alliance’s economic analysis for each state and the nation as a whole are available athttps://all4ed.org/publication_material/EconStatesPostsecondary.
The Alliance for Excellent Education is a Washington, DC-based national policy and advocacy organization that works to improve national and federal policy so that all students can achieve at high academic levels and graduate from high school ready for success in college, work, and citizenship in the twenty-first century. For more information about the Alliance for Excellent Education, please visit https://all4ed.org