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Cost Estimates of Dropping Out of High School in America

There is no generally accepted definition of a dropout that I know. Some use school enrollment figures; others rely on US Census population surveys. Some include GED recipients; others do not. Some keep records of transfer students; many do not.

Today, thanks to Stephen Downes it came to our knowledge the participation of Wesley Fryer in the Oklahoma State Superintendent’s Dropout Summit and it gave me a great opportunity to speak about what is happening with the long discussed drop out trend.

The IES has statistics for 2004-2005 years. Which means we have not collected data for the 2008 yet.

Having so dispersed the numbers and information about what are tendencies of drop out in American high schools, it seems every state has been working in this field but there is not a place where we can find appropriate number as what is the actual cost of a drop out, as for example Canadians have right now.

Investment in human capital creates a multitude of positive personal and social externalities which fosters economic development and growth specially now in this economic downturn we are living.

Dropping out of high school imposes very high costs on the individual who drops out of school mainly through poor labor market outcomes but also from restricted access to higher education and training and a weaker voice in the political and electoral system.

As a result of their higher levels of joblessness and lower annual incomes, dropouts will pay less in payroll and income taxes (state and federal) and receive considerably more cash and in-kind transfer assistance (food stamps, Medicaid health insurance, rental subsidies) from the state and federal government than their better educated peers, at least that is what is been said by the State of
Massachusetts (pdf doc)

Margaret Spellings while addressing to a Hearing before the Committee on Education and the Workforce, House of Representatives said, dropouts “cost our nation more than $260 billion dollars… That is in lost wages, lost taxes, and lost productivity over their lifetimes. In federal dollars, that will buy you ten years of research at the National Institutes of Health.”

Well, those $ 260 billion are not actual because they correspond with the 2006. Data from Canadians, on the other hand is real and for them high school dropouts cost Canada's social assistance programs and criminal justice system more than $1.3 billion annually!

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  1. i wonder how much college dropouts costs nations...