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The Economic Benefits Of Reducing The Dropout Rate In The Nation’s Largest Metropolitan Areas: A Boom To Regional Businesses


Tim Nadreau
, Research Economist, Economic Modeling Specialists Inc.
Alma J. Powell, Chairwoman, America’s Promise Alliance
Edward B. Rust, Jr., Chairman and CEO, State Farm®
Bob Wise, President, Alliance for Excellent Education

More than seven thousand students become dropouts every school day. Annually, that adds up to almost 1.3 million students who will not graduate from high school with their peers as scheduled. In addition to the moral imperative to provide every student with an equal opportunity to pursue the American dream, there is also an economic argument for helping more students graduate from high school. Most people realize that high school dropouts are generally at a great disadvantage when it comes to finding a good job. However, few people realize that high school dropouts also influence a community’s economic health.

At this event, the Alliance for Excellent Education released findings from its groundbreaking analysis of regional economies and the significant economic contributions that additional high school graduates would make within their communities. The event featured projections for the forty-five largest metropolitan areas in the country on several key economic indicators—growth in jobs and gross regional product, increases in regional home and auto sales, and several others—all as the result of reducing the regional dropout rate for a single high school class by half.


On January 12, over 150 educators, business and community leaders, policymakers, and other key stakeholders gathered in Washington, DC to attend a forum highlighting the local economic benefits that come as a result of reducing the dropout rate. The event was held to release the Alliance for Excellent Education’s (the Alliance) recent publication titled The Economic Benefits from Halving the Dropout Rate: A Boom to Businesses in the Nation’s Largest Metropolitan Areas, which was made possible through generous support from State Farm Insurance®.

Bob Wise, president of the Alliance and former governor of West Virginia, opened the forum, noting that in a time of economic uncertainty, the Alliance has positive economic news: everyone in a community benefits when more students earn a high school diploma. He went on to discuss the Alliance’s report in more detail, explaining that, for the first time, it established a link between decreased dropout rates and the strength of a local economy.

Gov. Wise cited findings from the report showing that if just half of the Class of 2008 dropouts—from the forty-five largest metro areas featured in the report—had graduated, they would have likely earned over $4 billion in combined additional wages during the average year. This increased income, he explained, would be enough to support 30,000 new local jobs, significant increases in spending on home and vehicle purchases, and millions in increased tax revenues to state and local governments, many of which are facing crippling budget shortfalls.

Gov. Wise concluded by thanking State Farm Insurance® for their generous support of the project. He added that State Farm® has consistently been at the forefront of work to ensure every child receives a world-class education.

Edward B. Rust, Jr., chairman and chief executive officer of State Farm Insurance®, spoke of the scope of the nation’s dropout crisis, stating that every 26 seconds a student drops out of high school. He emphasized that everyone must do their part to address the crisis and called on his colleagues in the business community to get involved. Mr. Rust encouraged business leaders to use the information found in The Economic Benefits from Halving the Dropout Rate: A Boom to Businesses in the Nation’s Largest Metropolitan Areas to encourage their communities to work together to decrease the dropout rate in their schools.

Alma Powell, chairwoman of the America’s Promise Alliance, focused on the community nature of the dropout crisis, underscoring the fact that dropouts affect the nation collectively and that a collaborative effort to end the crisis is required. She used dropouts’ ineligibility to enter the military as an example of this, stating that a without a diploma one can not join the armed forces, and, compounded by thousands of dropouts, that individual consequence becomes a cost on a national scale. Ms. Powell asserted that the United States cannot maintain its status as one of the greatest nations in the world unless it addresses the dropout crisis. She encouraged every American to do their part, adding “one person can make a difference, but collectively we can’t fail.”

Following a brief question and answer period for media, an extended question and answer period featured Tim Nadreau, a research economist with Economic Modeling Specialists Inc. and consultant with whom the Alliance worked to develop the economic model that was used to produce the report’s findings, and Tara Tucci, a research and policy associate at the Alliance. The extended question and answer period was moderated by Jamie Fasteau, vice president of advocacy for the Alliance. During this time Mr. Nadreau and Ms. Tucci answered questions related to the methodology of the report, as well as data sources and assumptions of the work.

ABOUT THE STUDY: 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. See results for your city or read the press release.

Event-Day Agenda PDF filePDF
Speaker Biographies PDF filePDF
“Economic Benefits from Halving the Dropout Rate: A Boom to Businesses in the Nation’s Largest Metropolitan Areas” Booklet PDF filePDF (This booklet represents the findings for each of the forty-five metropolitan areas that together encompass the nation’s fifty largest cities, as well as aggregated findings across these areas.)

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