NCPA - National Center for Policy Analysis

THE DROPOUT TAX

March 31, 2005

The high school dropout rate for young minority students is soaring in California, and observers are worried the rest of the nation might soon be headed in the same direction.

A Harvard University report on California's education system is alarming, says Investor's Business Daily (IBD):

  • California's overall graduation rate (based upon a flawed formula that dramatically underestimates the actual number of dropouts) is approximately 71 percent, 16 percentage points lower than the official rate of 87 percent.
  • The graduation rates for African-American and Latino students are even lower, 60 percent for Latino students and 56.6 percent for African-Americans.

New research by the Urban Institute shows that California's largest school districts have some of the worst on-time graduation rates. Specifically:

  • Los Angeles and Oakland Unified School Districts graduate less than half of their incoming freshmen on time.
  • Six of the state's largest ten school districts graduate less than half of their Latino students: Los Angeles, San Diego, Fresno, Oakland, Sacramento City and San Bernardino City.

Consequently, the state loses billions of dollars in revenue each year because high school dropouts are ill prepared to join the work force, leading to higher unemployment and underemployment rates. Professor Russell Rumberger of University California, Santa Barbara calculated that just one year of high school dropouts costs the state $14 billion in lost wages.

According to the Census Bureau:

  • A person with a bachelor's degree can expect to earn $51,206 a year, on average, whereas a person without a high school diploma can expect to earn an annual average of $18,734.
  • Over a career of 35 years, the difference in earnings comes to $1.1 million.
  • Dropouts have been shown to suffer from higher rates of crime, incarceration, and drug and alcohol abuse; they may also die earlier than the population at large.

Source: Editorial, "The Dropout Tax," Investor's Business Daily, March 28, 2005; "Confronting the Graduation Rate Crisis," Civil Rights Project at Harvard University, March 24, 2005; and Christopher B. Swanson, "Who Graduates in California?" Urban Institute, March 24, 2005.

For Urban Institute text:

http://www.urban.org/Template.cfm?NavMenuID=24&template=/TaggedContent/ViewPublication.cfm&PublicationID=9216

 

Browse more articles on Education Issues