Economic Impacts

Posted by Pat Breen on
Understanding the issues that face us is the first step.
Alliance for Excellent Education

Alliance for Excellent Education

Nationally, more than 5,000 students drop out of school every school day. That calculates to more than 1 million students every year who do not graduate from high school with their peers.

Without a high school diploma, these individuals are far more likely to spend their lives periodically unemployed, on government assistance, or cycling in and out of the prison system. But in today’s knowledge-based economy, high school dropouts are not the only ones affected when they choose to drop out.

Lower local, state, and national tax revenues are the most obvious consequences of higher dropout rates; even when dropouts are employed, they earn, on average, $8,000 less annually than high school graduates and they pay less in taxes. State and local economies suffer further when they have less-educated populaces, as they find it more difficult to attract new business investments. Simultaneously, these entities must spend more on social programs when they have lower educational levels.

On the other hand, everyone benefits when students earn their high school diplomas. The graduates themselves earn more and typically enjoy more comfortable and secure lifestyles. At the same time, high school graduates’ increased purchasing power boosts national, state, and local economies; increases home and auto sales; creates jobs and economic growth; and leads to higher tax receipts. This is why the best economic stimulus is a high school diploma.

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