Year: 2014
Type: article
Abstract: In this report, we first calculate the economic losses to the state of California that result from students' failure to complete their high school education, and then relate these losses to current school policies on suspension.California's current education system does not ensure that all students will graduate from high school and enter adulthood fully prepared for productive citizenship.Almost 100,000 members of each cohort of California students will drop out of high school.These dropouts typically face substantially poorer economic and personal well-being than those who earn a high school diploma, which puts financial pressure on the state and local government agencies that spend increased amounts on health, criminal, and welfare services due to high dropout rates.Federal government spending on dropouts is also significant.Using a standard economic model, along with state-specific data and up-to-date research, we calculate the social and fiscal consequences for California students of dropping out of high school.We take the perspective of an 18-year-old student in California in 2014 who is facing a lifetime of work.The consequences are expressed as the lifetime differences between high school dropouts and graduates in terms of income; taxes paid; government spending on health care, crime, and welfare; tax distortions; and productivity gains.Spending is calculated separately based on whether it comes from federal or state/local sources.Separate analyses are performed by sex and race/ethnicity, and then pooled to derive statewide estimates.• The social losses per high school dropout in California cost from $381,000 to $580,000.The impact of social losses costs the state $37-$56 billion per cohort.• The fiscal consequences of dropping out are also significant.The state loses between $118,000 and $175,000 in net tax revenues per dropout, while the aggregate impact for California taxpayers is a loss of $11-$17 billion per cohort.
Author: Clive Belfield
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
SDG: Quality education
Open Access status: green
OpenAlex ID: W2767506811