By: Professor Henry M. Levin

We all know that if we can turn a potential high school dropout into a graduate, that individual is likely to have better employment, income, and health as well as the prospects of going to college. But, sometimes we also hear that this is a good investment for society because high school graduates pay more taxes and reduce the costs of public health, public assistance, and crime.

A group of economists at the Center for Benefit Cost Studies in Education at Teachers College, Columbia University, decided to test the idea that improving the education of at risk students is also a good financial investment for the taxpayer and society. Clive Belfield, Peter Meunnig, Cecilia Rouse, and I collaborated on a study to compare the public benefits and costs of investing more in high school completion.

First, we searched for programs that demonstrated beyond a reasonable doubt that they would increase high school graduation. Many programs make such claims, but lack proof. We found five different programs that showed these results convincingly. Two programs emphasized high quality preschools for at risk youngsters. One program reduced class size in the early grades from 24 students to 15 students. One approach evaluated teacher salaries to get a larger pool of talented teachers. And one provided a special high school program with caring teachers, smaller classes, frequent counselling, and regular assessment of progress.

Second, we measured the cost of each program for each additional graduate expected. Third, we obtained statistical data sets that enabled us to determine additional earnings and tax payments of graduates relative to high school dropouts as well as the reductions in costs of public assistance payments, public health costs, and costs of criminal justice. When we compared the costs of the programs for each new graduate produced with the additional tax revenues and reductions in the costs to the taxpayer of public assistance, public health, and crime, we found that the benefits to the taxpayer far exceeded the costs. Typically, for every dollar of expenditures on these programs, some three dollars were returned to the taxpayer in benefits. Another way of calculating the benefits after costs are taken into account is that each expected dropout who graduates will provide the equivalent of a gift of $127,000 at age 20 to society in public benefits over his or her lifetime.

Our conclusion is that paying for effective programs to reduce dropouts is good not only for the new high school graduate, but also for the taxpayer and society. The study can be found at (www.cbcse.org).

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