A Gift to Society - A New Graduate
Feature Story by Crystal Rosario, Citizens' Commission on Civil Rights - 4/11/2007
Investing $24.6 billion dollars to fund intervention programs aimed at raising graduation rates in schools affected the most by the dropout crisis could generate $87 billion in new tax revenues and savings over the lifetime of those students, a net gain of over $62 billion.
A recent study, by Henry Levin of the Columbia University Teachers College and colleagues, presents data demonstrating that investing in five programs proven to decrease dropout rates could save billions of tax dollars in increased tax revenue from higher paying jobs and decreased spending on other government programs over the lifetime of a cohort of students.
In "The Costs and Benefits of an Excellent Education for All of America's Children," Henry Levin, Clive Belfield, Peter Muennig, and Cecilia Rouse find that an overall investment of $82,000 in educational programs and additional schooling years per potential dropout creates $209,100 in tax revenues and decreased public spending over the lifetime of that student, yielding a net gain of $127,100 (all estimates are in current dollars).
"In all fairness we want these students to complete high school so they have more opportunities, but the surprise is that there is a gift to society--a new graduate," said Dr. Levin.
The cost figure for the investment made in the student includes the cost of providing intervention programs to all students at the school, only some of whom are potential dropouts, and the costs of continuing education for students that would have otherwise dropped out.
The public benefit derives from the increased tax revenue generated from the higher paying job a high school graduate attains versus a dropout, lower incarceration costs, and lower enrollment in government programs, such as Medicaid and welfare. The researchers used a conservative approach by not including benefits that are not easily quantified, like decreasing rates of teen pregnancy, juvenile crime, or improved civic engagement, which could make the benefits even greater than the study reports.
Their research included five proven intervention programs: First Things First, Chicago Parent-Child Centers, teacher salary increases, Perry Preschool, and class size reduction.
To get the biggest bang for the buck, the question becomes where to target these intervention programs. In "Locating the Dropout Crisis," Bob Balfanz and Nettie Legters of the Johns Hopkins University identify 2000 "dropout factories," schools that routinely graduate 60 percent or fewer of their students.
These schools, located primarily in urban centers and rural areas spread throughout southern and south western states, account for half of all the nation's dropouts despite being only 15 percent of the nation's high schools.
By combining the findings of these two reports reform programs can be targeted at schools hit hardest by the dropout crisis.
The program with the highest cost benefit ratio is First Things First which entails comprehensive school reform of small learning communities with dedicated teachers, family advocates, and instructional improvement efforts.
To provide this program to the 2.6 million students in all 2000 dropout factories would cost $14.3 billion ($24.6 billion including the cost of additional years of schooling for students who would not have otherwise completed high school), resulting in at least an additional 416,000 graduates. The fiscal benefits of graduating these students would come to approximately $87 billion, a net gain of $62.4 billion.
Among the five programs studied, even the one with the smallest impact on graduation rates, which was also the least expensive reform to institute, had a net positive financial impact. Applying the teacher salary increase model to the 2000 dropout factories would cost $7.5 billion (approximately $10.7 billion including additional years of schooling), resulting in 130,000 additional graduates and a fiscal benefit of $27.2 billion, or a net gain of $16.5 billion.
The dropout problem in the United States is immense. Annually, 1.2 million American students leave high school without receiving a diploma. The U.S. has dropped from 1st to 11th when ranked by graduation rates in comparison to other industrialized nations, falling below the Organisation for Economic Co-operation and Development average (OECD Sept. 2006).
The prognosis is even worse for minority and low income children. Levin's report states "In the United States we share a common expectation that all citizens will have access to high quality education that will reduce considerably the likelihood of later lifetime inequalities."
Yet, large differences in educational quality and attainments persist across income, race, and region." Balfanz and Legters found that 46% of African Americans, 39% of Latinos, and 11% of whites attend schools with "low promoting power;" yet poverty, not race, appears to be the main correlating factor with these schools.
This promising research quantifies what we already know – investing in the education of America's youth is good for society as a whole.
More than 50 years after Brown v. Board of Education was decided, many American schools are still segregated by race and socioeconomic status. This modern day segregation continues to deny minority students access to a quality education, which is indisputably the key to a promising future.
Levin's report acknowledges that making these reforms is first and foremost a moral imperative, and secondly a fiscally responsible policy.
"This is specific research with specific reforms linking increased education with increased economic outcomes," said former Gov. Bob Wise. "This is a moral and economic argument for not giving up on any student."
