The economic benefits of dropout prevention

It’s kind of obvious that reducing the number of students who drop out of school would reap economic benefits, but the Alliance for Excellent Education has taken this truism one step further and attempted to calculate the benefits, on a national scale and for each of the 40 largest metropolitan areas in the country (including the five-county SF-Oakland Bay Area).

Almost 12,000 members of the class of 2008 in the Bay Area dropped out of high school. If just half of those dropouts were prevented, the group says, their economic model predicts these impacts:

  • An increase in human capital, because finishing high school is a good predictor for higher educational attainment. The model predicts that 81 percent of people who achieve a high school diploma eventually go on to college and sometimes graduate school;
  • $116 million in increased wages paid to these individuals over the course of an average year (this works out to about $20,000 a year per person in additional earnings);
  • $17 million in increased tax revenue for cities and counties.
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