America cannot afford the stiff price of a dropout nation

Kenny Buchanan is 44 years old and dropped out of high school 26 years ago. He’s been paying the price ever since. He’s held eight jobs in the last five years and has never earned more than $40,000 in a year.

Kenny is one of 40 million Americans who never graduated from high school.

Dropouts face bleak economic futures. Dropouts are the least educated workers in the labor market and thus have the poorest job prospects compared to more educated workers. This means they are less likely to find jobs, and when they do find them, the jobs generally pay the lowest wages.

Dropouts are also less likely than more educated workers to invest in additional education and training, further limiting their prospects for securing well-paying jobs over their entire working lives. The difference in lifetime earnings between dropouts and high school completers exceeds half a million dollars. As a result of their low earnings, dropouts are more likely to live in poverty and require public assistance throughout their lifetimes.

The consequences of dropping out are not just economic. Dropouts are more likely to engage in crime and, consequently, are more likely to be arrested and incarcerated. In 2006-07, young dropouts were six times more likely than high school graduates to be incarcerated. Dropouts are more likely to experience teenage childbearing, unplanned childbearing, and non-marital childbearing, all of which can lead to adverse consequences for them and their children. Dropouts also have poorer health and, as a result, have a life expectancy nine years less than high school graduates. Finally, dropouts are less likely to vote and to participate in community activities.

The individual consequences of dropping out exact a huge social cost that all Americans must pay. The low human capital of high school dropouts robs the economy of skills needed to fuel economic growth and enhance U.S. competitiveness in the global economy. President Obama has set a national goal of the United States having the highest proportion of students graduating from college in the world by the year 2020. But we will never get there as long as we remain 20th in the world in the proportion of high school graduates.

The poor economic outcomes for dropouts translate into huge financial losses for the country, for states, and for local communities. Economist Cecilia Rouse estimates that over their lifetimes the nation’s dropouts from a single 20-year-old age cohort will account for at least $165 billion in foregone economic income for the country and $58 billion in lost tax revenues. The Alliance for Excellent Education has produced similar estimates for states and local communities. For instance, if half of the estimated 70,000 dropouts from the high school class of 2008 in the Los Angeles-Long Beach metropolitan area had graduated, they would have generated $575 million in additional wages over their working lives and paid an additional $79 million in taxes.

The increased criminal activities from dropouts – arson, robbery, theft, rape, murder, and family violence – exact tremendous economic, physical, and emotional harm on victims. The victim costs alone for crime range from $370 for larceny to $2.9 million for murder, while the incarceration expense – borne by taxpayers – ranges from $44 for larceny and theft to $845,455 for murder.

Dropouts are more likely to qualify for and receive government welfare benefits.

Taxpayers also pay for dropouts’ poor health. Dropouts are two to three times more likely than high school graduates to receive government-funded Medicaid benefits.

Adding the reduced tax revenues and increased public expenditures for crime, welfare, and health, economist Henry Levin and his colleagues estimated that the “average” 20-year-old dropout generates more than $200,000 in economic losses over his or her working lifetime, while an entire cohort of 20-year-old dropouts generates a total economic loss of $148 billion.

Dropouts are indeed costly. But the costs are not just economic.

The high rate of poverty among dropouts is transmitted from one generation to the next. Children raised in poor families are two to seven times more likely to be poor in early adulthood compared to children raised in non-poor families.

And the low voter and civic engagement of dropouts undermines our democratic way of life. As political scientist Larry Bartels points out, the growing economic inequality in our country produces inequality in political responsiveness and public policies that are increasingly detrimental to the interests of the poorest and least educated Americans.

President Obama recognized that every American has a stake in solving the nation’s dropout crisis when he said: “So this is a problem we cannot afford to accept and we cannot afford to ignore. The stakes are too high – for our children, for our economy, and for our country.”

Russell W. Rumberger is Vice Provost for Education Partnerships at the University of California Office of the President and Professor of Education at UC Santa Barbara. He also directs the California Dropout Research Project. He has written about dropouts for the past 30 years and is author of Dropping Out: Why Students Drop Out of School and What Can Be Done About It (Harvard University Press). This article first appeared in Education News.

Author: Russell Rumberger

Russell W. Rumberger is Vice Provost for Education Partnerships at the University of California Office of the President and Professor of Education at UC Santa Barbara. He also directs the California Dropout Research Project. He has written about dropouts for the past 30 years and is author of Dropping Out: Why Students Drop Out of School and What Can be Done About It (Harvard University Press, 2011).

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