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New Economic Model Links a Decrease in the High School Dropout Rate to Economic Gains

Press Release:

New Economic Model Links a Decrease in the High School Dropout Rate to Economic Gains

Halving the Dropout Rate in Twelve of America’s Largest Cities Would Result in $1.5 Billion in Additional Wages and 61,800 New Homeowners
Were twelve of the nation’s largest cities to reduce the number of dropouts for a single high school class by just 50 percent, they would see a total of more than $1.5 billion per year in additional wages and 61,800 new homeowners, according to a new economic analysis by 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.”

The analysis, which covers Atlanta, Ga.; Chicago, Ill.; Detroit, Mich.; Houston, Tex.; Indianapolis, Ind.; Jackson, Miss.; Louisville, Ky.; Nashville, Tenn.; New Orleans, La.; New York, N.Y.; Oakland, Calif.; and Washington, DC, also finds that a significant percentage of new high school graduates would continue their education after high school-from a low of 34 percent in Louisville to a high of 71 percent in Oakland.

These findings are the first to come from a sophisticated economic model that the Alliance for Excellent Education developed in partnership with Economic Modeling Specialists Inc. The model, developed with the generous support of State Farm®, allows various economic projections to be made for a given U.S. Census-defined metropolitan statistical area (MSA), which consists of both a central urban area and the surrounding geographic area that has strong social and economic ties to that city.

“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 CEO of State Farm®. “These economic indicators demonstrate that graduating from high school has significant consequences. We must continue to collaborate and assure that all of our students graduate from high school with the skills necessary to compete in a global economy and a world of life long learning.”

Released on September 18 at the GradNation Action Forum hosted by the America’s Promise Alliance in Washington, DC, the analysis uses data from the Editorial Projects in Education, which found that these twelve metro areas accounted for an estimated 233,756 non-graduates in 2008.

“The high school dropout crisis in this country is as much an economic issue as an educational one. With each class of dropouts our nation loses more than three hundred billion dollars in taxes and revenue,” said Marguerite W. Kondracke, president and CEO, America’s Promise Alliance, “This new research by the Alliance for Excellent Education takes us even deeper into the economic aftermath of this crisis, once again reminding us that the ability of our nation to compete in this global economy hinges on the success of our young people and whether they earn a diploma.”

Detailed reports for each metro area can be found at

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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 graduate, prepared for postsecondary education and success in life. For more information about the Alliance for Excellent Education, please visit

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