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New Blockbuster Study Reveals Lowering High School Dropout Rate Significantly Increases Job Creation, Home Ownership, Spending and Investment Income, Car Sales

Press Release:

New Blockbuster Study Reveals Lowering High School Dropout Rate Significantly Increases Job Creation, Home Ownership, Spending and Investment Income, Car Sales

Washington, DC – As a result of a new game-changing study it released today, the Alliance for Excellent Education (Alliance) said there was demonstrated evidence that lowering the high school dropout rate will have important positive implications for the economic vitality of the forty-five largest metropolitan areas in the United States.

The study, “The Economic Benefits from Halving the Dropout Rate: A Boom to Businesses in the Nation’s Largest Metropolitan Areas” measures on a city-by-city basis the growth in jobs, home ownership, levels of spending and investment, and car sales that will result from cutting the high school dropout rate in half.

According to Bob Wise, Alliance president and former governor of West Virginia, this report clearly proves that everyone benefits from improved education. “The report underscores the notion that the best economic stimulus package is a high school diploma,” he said. “If the U.S. is to improve its competitiveness in the global economy, it must have an education system that meets the fast-growing demand for high-level skills,” concluded Wise.

Summary of Key Findings

In the nation’s fifty largest cities and the forty-five metropolitan areas that surround them, an estimated 600,000 students dropped out from the Class of 2008 at great cost not only to themselves but also to their communities. If high school dropout rates were reduced by half, graduates in the United States would likely have

  • bought homes worth $10.5 billion more than what they would likely spend without a diploma;
  • supported 30,000 additional jobs and increased the gross regional product in these areas by a total of up to $5.3 billion by the time these new graduates reach the midpoint of their careers;
  • seen $4.1 billion in combined additional earnings in the average year;
  • spent an additional $2.8 billion and invested an additional $1.1 billion each year;
  • boosted tax revenue by $536 million each year; and
  • spent an additional $340 million each year purchasing vehicles.

Below are key findings for three of the forty-five U.S. metropolitan areas included in the report.

In the Washington, DC metropolitan area, an estimated 18,200 students dropped out from the high school Class of 2008. If high school dropout rates were reduced by half, graduates in the Washington, DC metropolitan area would likely have

  • bought homes worth $275 million more than what they would likely spend without a diploma;
  • supported 750 additional jobs and increased the gross regional product by as much as $179 million by the time these new graduates reach the midpoint of their careers;
  • seen $157 million in increased earnings in the average year;
  • spent an additional $99 million and invested an additional $43 million each year;
  • boosted tax revenue by $22 million; and
  • spent an additional $11 million each year purchasing vehicles.

In the Denver, CO metropolitan area, an estimated 8,800 students dropped out from the high school Class of 2008. If high school dropout rates were reduced by half, graduates in the Denver metropolitan area would have

  • bought homes worth $251 million more than what they would likely spend without a diploma;
  • supported 450 additional jobs and increased the gross regional product by as much as $87 million by the time these new graduates reach the midpoint of their careers;
  • seen $69 million in increased earnings in the average year;
  • spent an additional $47 million and invested an additional $18 million each year;
  • boosted tax revenue by $8 million; and
  • spent an additional $5 million each year purchasing vehicles.

In the Philadelphia, PA metropolitan area, an estimated 16,400 students dropped out from the high school Class of 2008. If high school dropout rates were reduced by half, graduates in the Philadelphia metropolitan area would have

  • bought homes worth $294 million more than what they would likely spend without a diploma;
  • supported 900 additional jobs and increased the gross regional product by as much as $159 million by the time these new graduates reach the midpoint of their careers;
  • seen $125 million in increased earnings in the average year;
  • spent an additional $83 million and invested an additional $32 million each year;
  • boosted tax revenue by $18 million; and
  • spent an additional $10 million each year purchasing vehicles.

The economic model used to generate this report was developed by the Alliance for Excellent Education with the generous support of State Farm® and in partnership with Economic Modeling Specialists Inc.

“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 has significant positive economic and financial consequences for the business community and not just for the individual getting the education. Assuring that all of our students graduate from high school with the skills necessary to compete in a global economy is something all businesses—small and large—should see as a priority.”

“The report’s findings prove that raising high school graduation rates are a strategic way to bring economic growth and global competitiveness to our nation,” said Marguerite Kondracke, president and chief executive officer of America’s Promise Alliance. “By increasing the number of young people who finish high school, we can make a big difference in our local communities. Whether that translates into increased home sales, lower unemployment rates, and bigger revenues, the impact is clear.”

The report includes detailed findings for each of the forty-five largest metropolitan areas in the United States: Albuquerque, Atlanta, Austin, Baltimore, Boston, Charlotte, Chicago, Cleveland, Colorado Springs, Columbus, Dallas-Fort Worth-Arlington, Denver, Detroit, El Paso, Fresno, Honolulu, Houston, Indianapolis, Jacksonville, Kansas City (MO), Las Vegas, Los Angeles-Long Beach, Louisville, Memphis, Miami, Milwaukee, Minneapolis, Nashville, New York City, Oklahoma City, Omaha, Philadelphia, Phoenix-Mesa, Portland (OR), Sacramento, San Antonio, San Diego, San Francisco-Oakland, San Jose, Seattle, Tucson, Tulsa, Virginia Beach, Washington, DC, and Wichita.

For more information and specific statistics for each of the metropolitan areas listed above, please visit the Alliance’s website athttps://all4ed.org/publication_material/EconMSA.

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The Alliance for Excellent Education is a Washington, DC-based policy, research, and advocacy organization that works to make every child a high school graduate who is prepared for postsecondary education and success in life. For more information about the Alliance, please visitwww.all4ed.org.

Categories: High School Dropout Rates

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