The Economic Benefits of Reducing the Dropout Rate 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 some of the nation’s 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 the forty-five largest metro regions and released those findings on January 12, 2010. On June 9, 2010, the Alliance released findings on an additional forty-three metro areas.
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 see how cutting the dropout rate in half in the nation’s fifty largest cities—and the metropolitan areas that surround them—would benefit the nation’s economy as a whole, read the national analysis.
To view the one-page document of the economic benefits for a particular city/metro area, please click on it in the list below.
Download "The Economic Benefits from Halving the Dropout Rate: A Boom to Businesses in the Nation’s Largest Metropolitan Areas", a report released in January 2010 that contains the individual analyses for each of the nation's forty-five largest metro areas, as well as the national analysis. To view the results for each of the nation's forty-five largest metropolitan area in one easy-to-read table, read the summary of findings.
For more information and specific statistics on how lowering the high school dropout rate among students of color can increase economic growth in each of the metropolitan areas listed above, visit http://www.all4ed.org/publication_material/EconMSAsoc.
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.
- January 12 Press Release
- January 12, 2010 Release Event