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The Economic Benefits from Halving the Dropout Rate: A Boom to Businesses in the Nation’s Largest Metropolitan Areas

Few people realize the impact that high school dropouts have on a community’s economic, social, and civic health.
Business owners and residents—in particular, those without school-aged children—may not be aware that they have
much at stake in the success of their local high schools. Indeed, everyone—from car dealers and realtors to bank
managers and local business owners—benefits when more students graduate from high school.

Nationally, more than seven thousand students become dropouts every school day. That adds up to almost 1.3
million students annually who will not graduate from high school with their peers as scheduled. In addition to the
moral imperative to provide every student with an equal opportunity to pursue the American dream, there is also an
economic argument for helping more students graduate from high school.

To better understand the various economic benefits that a particular community could expect if it were to reduce its
number of high school dropouts, the Alliance for Excellent Education (the Alliance), with the generous support of
State Farm®, analyzed the local economies of the nation’s fifty largest cities and their surrounding areas. Using a
sophisticated economic model developed by Economic Modeling Specialists Inc., an Idaho-based economics firm
specializing in socioeconomic impact tools, the Alliance calculated economic projections tailored to each of these
metro regions.

These projections estimate the gross increase in important local economic factors such as individual
earnings, home and auto sales, job and economic growth, spending and investment, tax revenue, and human capital
based on two scenarios:

1) Reducing by half the number of local students from the Class of 2008 who failed to graduate
with their class.

2) Reducing by one thousand the number of local students from the Class of 2008 who failed to
graduate with their class.

To view the economic benefits to the nation as a whole, read the national analysis.

To view the one-page document of the economic benefits for each particular city/metro area, please click on it in the list below.

Albuquerque, NM   Houston, TX Phoenix-Mesa, AZ
Atlanta, GA Indianapolis, IN Portland, OR
Austin, TX Jacksonville, FL Sacramento, CA
Baltimore, MD Kansas City, MO San Antonio, TX
Boston, MA Las Vegas, NV San Diego, CA
Charlotte, NC Los Angeles - Long Beach, CA San Francisco-Oakland, CA
Chicago, IL Louisville, KY San Jose, CA
Cleveland, OH Memphis, TN Seattle, WA
Colorado Springs, CO Miami, FL Tucson, AZ
Columbus, OH Milwaukee, WI Tulsa, OK
Dallas-Ft. Worth-Arlington, TX Minneapolis, MN Virginia Beach, VA
Denver, CO Nashville, TN Washington, DC
Detroit, MI New York City, NY Wichita, KS
El Paso, TX Oklahoma City, OK  
Fresno, CA Omaha, NE  
Honolulu, HI Philadelphia, PA National Analysis

Download the full report containing the individual analyses for each of the 45 metro areas, as well as the national analysis: "The Economic Benefits from Halving the Dropout Rate: A Boom to Businesses in the Nation’s Largest Metropolitan Areas."

To view the results for each metropolitan area in one easy-to-read table, read the summary of findings.

Supplemental Materials

  • Frequently Asked Questions: The Alliance for Excellent Education has prepared a list of frequently asked questions about the cities included in the analysis, more information about the economic model, and future calculations the Alliance will release from the model, among others.
  • Technical Notes: The technical notes document includes a more sophisticated explanation of how the model was constructed and how specific calculations were performed.
  • Press Release
  • January 12, 2010 Release Event