According to the Alliance for Excellent Education’s latest analysis, halving the dropout rate of minority high school students would lead to $2.3 billion in increased earnings in an average year and an additional 17,450 jobs.
Those are part of the aggregate results from All4Ed’s new study, which uses a model developed by EMSI and looks at the 45 biggest metro areas in the US. The report, released last week, comes after All4Ed’s broader analysis in January of the economic benefits of lowering the high school dropout rate among all students.
Estimates show that approximately 50% of black, Native American, and Latino students — 20% less than their white counterparts — drop out of high school.
Nationally, students of color made up a sizeable portion of the estimated 600,000 students who dropped out from the Class of 2008 in the nation’s forty-five largest metropolitan areas. Of these students, approximately 113,600 were African American, 200,000 were Latino, 30,800 were Asian American and 3,750 were American Indian. Cutting the number of these dropouts in half would likely produce vast economic benefits by boosting the spending power of these communities of color and spurring job and economic growth in these regions.
The study goes beyond estimating increased earnings of new graduates by also looking at increased spending and investment, additional home/auto sales, increased human capital, and state/local tax revenues.
Increased earnings in the All4Ed study for new grads “represent the combined additional earnings at the midpoint of these students’ careers.” The study’s authors identified the career midpoint as the year when new grads are expected to make the average of their annual earnings. The other benefits are taken from that midpoint — age 39 for the purposes of the analysis — or all years prior to and including the midpoint. See the technical notes for a more detailed description of the methodology.