Graduation & College

The Costs of Dropping Out

The costs of dropping out of high school to both the dropout and society as a whole are astounding.

• $260,000 less in income versus high school graduates.
• $1 million less in income versus college graduates.
• 3 times more likely to be unemployed.
• 1/2 as likely to be in excellent or very good health.
• 8 times as likely to be in jail or prison.

Over a lifetime, high school dropouts earn $260,000 less than individuals with a diploma and pay $60,000 less in federal and state income taxes¹.  For the estimated 7,985 dropouts among Utah’s class of 2008, that’s $2,076,173,760 they would have earned had they graduated².  The combined income and tax losses nationwide aggregated over one cohort of 18-year-olds who do not complete high school is about $192 billion, or 1.6 percent of the gross domestic product³.

According to another study, high school dropouts, on average, earn $9,200 less per year than high school graduates, and about $1 million less over a lifetime than college graduates⁴. Students who drop out of high school are often unable to support themselves; high school dropouts were over three times more likely than college graduates to be unemployed in 2004⁵. They are twice as likely as high school graduates to slip into poverty from one year to the next⁶. And there even seems to be a correlation with education and good health: at every age range, the more education, the healthier the individual. Among Americans over 45, college graduates are twice as likely as dropouts to report being in excellent or very good health⁷.

The prevalence of high dropout rates not only imperils individual futures but also profoundly impacts our communities and nation due to the loss of productive workers, the earnings and revenues they would have generated, and the higher costs associated with increased incarceration, health care and social services. Four out of every 10 young adults (ages 16 – 24) lacking a high school diploma received some type of government assistance in 2001, and a dropout is more than eight times as likely to be in jail or prison as a person with at least a high school diploma⁸.  Studies show that the lifetime cost to the nation for each youth who drops out of school and later moves into a life of crime and drugs ranges from $1.7 to $2.3 million⁹.

Sources

1. Rouse, Cecilia (September 2005). The Labor Market Consequences of an Inadequate Education. Princeton University.  Accessed at: http://devweb.tc.columbia.edu/manager/symposium/Files/77_Rouse_paper.pdf
2. Alliance for Excellent Education (June 2008). The High Cost of High School Dropouts: What the Nation Pays for Inadequate High Schools.  Accessed at: http://www.all4ed.org/files/HighCost.pdf
3. Rouse.
4. Doland, E. (2001). Give Yourself the Gift of a Degree. Washington, DC: Employment Policy Foundation
5. National Center on Education Statistics (2005). Digest of Education Statistics 2004. Table 378. Accessed at http://nces.ed.gov/programs/digest/d04/tables/dt04_378.asp.
6. Iceland, John (2003). Dynamics of Economic Well-Being: Poverty 1996-1999. Washington DC: U.S. Census Bureau. Detailed Tables (not in report, but available online) Table 5: Poverty 1996/1997. Accessed at http://www.census.gov/hhes/www/poverty/sipp96/table059697.html.
7. Baum and Payea, 18. Citing data from the 2001 National Health Interview Survey of the National Center for Health Statistics. See also; Rumberger (2001), 3.
8. Calculations based on Harlow, C. W. (revised 2003). Education and Correctional Populations. Bureau of Justice Statistics Special Report. Washington, DC: U.S. Department of Justice. Accessed at: http://www.ojp.usdoj.gov/bjs/pub/pdf/ecp.pdf.
9. Snyder, Howard & Melissa Sickmund (1999). Juvenile Offenders and Victims: 1999 National Report. Pittsburgh, PA: Office of Juvenile Justice and Delinquency, U.S. Department of Justice. Accessed at: http://www.ncjrs.org/html/ojjdp/nationalreport99/toc.html.