Education and the Economy: Economic Effects of Improving Graduation Rates (US)

Education and the Economy: Economic Effects of Improving Graduation Rates (US)


Alliance for Excellent Education


The economic projections look at 4 scenarios, in which the number of students dropping out from a single high school class are reduced by 25%, 50%, 75%, and an idealistic 100%. Each scenario is broken down by geographic area (metropolitan statistical area or state) and ethnic category. Importantly, this data projects the gross benefit to the local economies, not the net benefit (which would factor in the costs necessary to achieve higher graduation rates.)

Eight benefit indicators are included: increased annual earnings, increased investment, increased spending, increased state tax revenue, increased value of home sales, increased value of vehicle sales, new jobs created, and growth in State/Local GDP. These benefits are calculated at the “career midpoint” (age 39) of the imagined new graduates, either as a snapshot of that single year or as a cumulative figure up to that year. A second sheet in the file provides contextual data about the proposed new graduates in each scenario, including their expected education attainment and average annual income.

Source: The Alliance for Excellent Education – a policy and advocacy organization focused on promoting high school transformation to make it possible for every child to graduate prepared for postsecondary learning and success in life – has produced this data in partnership with State Farm®. The projections come from a sophisticated input-output model, developed by Economic Modeling Specialists, Inc. Historical data for graduation rates is provided by Editorial Projects in Education’s Research Center, a division of the nonprofit organization that publishes Education Week.