Report Roundup

Dropout Costs Priced for 50 Major U.S. Cities

"The Economic Benefits of Reducing High School Dropout Rates in America’s Fifty Largest Cities"

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If half the students who dropped out of the class of 2008 had graduated, they would have generated $4.1 billion more in wages and $536 million in state and local taxes nationally in one average year of their working lives, according to a new analysis.

The study, issued this month by the Washington-based Alliance for Excellent Education, calculates what the dropout problem costs the country and each of the 50 largest metropolitan areas.

Underwritten by State Farm Insurance of Bloomington, Ill., the study uses a model developed by an Idaho company that specializes in tools for socioeconomic analysis. The model blends education and jobs data, and an examination of each metropolitan region’s economy, to estimate the increased wages, education, and tax revenue that would be generated if the dropout rate were cut in half.

The numbers vary depending on each region’s peculiarities. In a conference call with reporters, Bob Wise, the president of the alliance, noted that 84 percent of high school graduates in Honolulu go on to some kind of postsecondary education, compared with 47 percent in Memphis. For the area that includes Los Angeles and Long Beach, Calif., for instance, the study finds that if half of the 70,929 students who dropped out of the class of 2008 had earned diplomas, they would have contributed $575 million more in wages and $79 million in property, sales, and income taxes during an average year, which the alliance defines as when a graduate is about 39 years old.

The national dropout count—599,755 students in the class of 2008—was calculated using a method devised by the Editorial Projects in Education Research Center, which is an arm of the same organization that publishes Education Week.

Mr. Wise said that he hopes the data in the report make clear to local business people the stake they have in improving the graduation rates in their communities, even if they don’t have children attending the public schools.

“Nearly 600,000 students dropped out of the class of 2008, at a great cost to themselves,” he said, “but as this study demonstrates, also to their communities.”

Vol. 29, Issue 13, Page 5

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