The Wonk Room

Study: High School Grad’s ‘Net Fiscal Benefit’ To Country Is $250,000 Greater Than Dropout’s

We’ve noted before that the fiscal rate of return on investments in education can be quite high — upwards of 10 percent — simply because “better educated people are more productive, get sick less often, are less likely to require public assistance, commit fewer crimes, make more money, and pay more in taxes.”

In a report released today, the Center for Labor Market Studies at Northeastern University confirmed this notion and attached a dollar amount. The Center found that a high school grad’s net fiscal benefit to the country is $250,000 greater than that of a high school dropout:

[A]dults with high school diplomas contribute major fiscal benefits to the country over their working lifetime. The Center estimates that “the combined net fiscal” benefits – including the payment of payroll, federal, and state income taxes, and local property taxes versus the receipt of cash and in-kind transfers and the considerable costs of incarceration and parole/probation – adds up to more than $250,000 per youth who finishes high school over their lifetime relative to the average high school dropout.

The Center also noted that in 2007 “16.0% of persons between 16 and 24 years of age (nearly 6.2 million people) were high school dropouts,” while “the cost of funding an effective two-year program to re-enroll students who have dropped out is about $20,000.”