U.S. ECONOMY COULD GAIN $309 BILLION w/o Dropouts

U.S. ECONOMY COULD GAIN $309 BILLION IF ALL HIGH SCHOOL STUDENTS GRADUATE ON TIME

If high school dropouts of the nation’s class of 2006 had instead earned their diplomas with their classmates, the U.S. economy could have benefited from an additional $309 billion in wages over these students’ lifetimes, according to conservative calculations by the Alliance for Excellent Education in its new brief, The High Cost of High School Dropouts: What the Nation Pays for Inadequate High Schools, funded by MetLife Foundation.

The average annual income for a high school dropout in 2004, according to the U.S. Census Bureau, was over $9,000 less than for a high school graduate. Graduating all students, therefore, increases overall earnings potential, which, in turn, benefits the nation with increased purchasing power and higher tax receipts.

The Alliance’s brief argues that dropouts drain the nation’s economy by lowering tax revenues and increasing the cost of social programs. High school graduates, on the other hand, make higher wages and live longer. They are less likely to be teen parents, commit crimes, and rely on government healthcare.

“Although there has been a very slight increase in high school graduation rates, the pace of improvement is glacial compared with the growing and urgent need to ensure all of our students are prepared for success in the 21st century,” said Bob Wise, president of the Alliance for Excellent Education and former governor of West Virginia. “As Congress prepares to renew the No Child Left Behind law this year, it must address the continuing hemorrhage of wages and taxes resulting from each class of high school dropouts.”
“Measuring the impact of increased high school graduation rates in dollars and cents drives home the serious challenges we all face when students drop out,” said Sibyl Jacobson, president of MetLife Foundation.

The High Cost of High School Dropouts: What the Nation Pays for Inadequate High Schools is available at http://www.all4ed.org/publications/HighCost.pdf.

The number of dropouts was determined using enrollment data for the ninth grade 2002-2003 school year (National Center for Educational Statistics, Common Core of Data: 2002) and the high school graduation rate in 2006 (Editorial Projects in Education, 2006), which was then multiplied by the $260,000 estimated lifetime earnings difference between a high school dropout and a high school graduate (Rouse, 2005).

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