The Economic Cost of Our High School Dropout Crisis

The economic and humanitarian price of our high school dropout crisis is truly alarming:

Nationwide, 7,000 students drop out every day and only about 70 percent of students graduate from high school with a regular high school diploma. Two thousand high schools in the U.S. produce more than half of all dropouts and a recent study suggests that in the 50 largest cities, only 53 percent of students graduate on time. Research shows that poor and minority children attend these so-called “dropout factories” – the 2,000 schools that produce more than 50 percent of our nation’s dropouts – at significantly higher rates.

Studies also highlight the financial impact of the nation’s dropout rates. A recent report by the McKinsey Corporation showed that if minority student performance had reached white students by 1998, the GDP in 2009 would have been between $310 billion and $525 billion higher – or approximately 2 to 4 percent of GDP. The report also says the achievement gaps in this country are the same as having “a permanent national recession.

“Currently this Congress is grappling with massive economic problems. But the enormous cost of bailing out the banks, financial institutions, the auto industry, and AIG is still less than the economic cost of just five years of dropouts in the United States,” said Bob Wise, president, Alliance for Excellent Education and the former Governor of West Virginia. “That is why I believe that the ultimate economic stimulus package is a diploma.”

Cutting the dropout rate in half would yield $45 billion annually in new federal tax revenues or cost savings, according to a recent report by Columbia University’s Center for Benefit-Cost Studies of Education at Teachers College.

Additional Statistics and Research on the High School Dropout Crisis

Over 25 to 30 years, a dropout student can cost a community as much as $500,000 in public assistance, health care, and incarceration costs.

Estimates of the social benefits (social savings from reduced crime only) of a 1% increase in male U.S. high school graduation rates would amount to $1.4 billion.

The High Cost of High School Dropouts What the Nation Pays for Inadequate High Schools (includes a state by state breakdown of the costs of dropouts)

USA Today. (2003). “Are Exit Exams Boosting Dropout Rates? Toppo, Greg, Lochner, L. & Moretti, E. (2001).

‘The Effect of Education on Crime: Evidence from Prison Inmates, Arrests, and Self-Reports’, National Bureau of Economic Research Working Paper, 8605,

And the American Youth Policy Forum (AYPF)