The Economic Upside to Increasing Grad Rates

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The Economic Upside to Increasing Grad Rates

As millions of students across the country accept their high school diplomas this graduation season, new data from the Alliance for Excellent Education shows the long-term and wide-reaching economic consequences of students not crossing the stage.

Using data from the 2014-2015 school year, the Graduation Effect, an online tool created by the Alliance, draws a straight line between educational attainment and economic success. As has been well demonstrated, high school graduates are less likely to be unemployed, live in poverty, have poor health, and engage in criminal behaviors.

While the national high school graduation rate reached an all-time high of 84.1 percent in 2016, these gains have not been spread equally. Students of color, students from low-income families, students with disabilities, and other historically underserved populations still graduate at rates substantially lower than national averages. The Alliance for Excellent Education aims to show how “continuing to ignore the educational needs of these students will limit the nation’s long-term economic potential.”

Conversely, raising graduation rates will have significant positive benefits on national and local economies. The Graduation Effect projects economic shifts that would result from a 90 percent graduation rate––these benefits include 14,260 new jobs, a $5.7 billion increase in GDP, $16.1 billion in savings on healthcare, and hundreds of millions in federal tax revenue. And that’s just in one year.

A 90% national high school graduation rate would mean

Importantly, the Alliance for Excellent Education maps the positive impacts that a 90 percent high school graduation rate would have on local economies, breaking the data down by state, metropolitan area, and demographic group so that it can be useful for local community leaders, policymakers, educators, parents, and others. 

For instance, Washington, D.C. has a graduation rate of 68.5 percent. Increasing the rate to 90 percent would mean $12.9 million in additional earnings, $1 million in state and local revenue, and $2.1 million saved in health care spending.

Greeley, a district in northeastern Colorado, has a graduation rate of 79 percent. An increase to 90 percent would stimulate the local economy, leading to an additional $3.4 million in earnings, $11.9 million in home sales, and $4.5 million saved on healthcare. (Greeley-Evans School District 6 has received a GradNation Acceleration Grant from America’s Promise for programs that provide holistic, wraparound services to historically underserved students who face significant barriers to success.)

“The reality is, we need every student to participate in this economy. It is morally wrong and economically a disaster to exclude students of color, ethnicity, or low-income status,” said Bob Wise, president of the Alliance for Excellent Education and former Governor of West Virginia, in a webinar panel announcing the data.

The fix? To raise high school graduation rates for these key student subgroups, experts highlighted the importance of diverse, effective mentors who both challenge and support their students.

San Antonio Councilmember Rey Saldaña discussed the importance of caring adults in his educational development. An English learner whose parents never made it past eighth grade, Saldaña spoke about how the economic impacts of not having a high school diploma played out in his home community.

Dr. Lillian Lowery, vice president of preK-12 policy and practice at the Education Trust, neatly summed up the discussion: “If the child succeeds, the whole community succeeds.”

What can you do?  The Alliance for Excellent Education suggests three things: Learn more about the economic impact of raising graduation rates, share that information with state and district leaders to support local solutions, and advocate for programs and policies that keep young people on track to succeed in high-school and beyond. For more specific practices and developments that have been demonstrated to improve outcomes for young people, see the GradNation Action Platform.

The Alliance for Excellent Education is a partner of America’s Promise Alliance and a leading partner of the GradNation campaign.

Learn more about the GradNation State Activation Initiative

GradNation State Activation initiative is a collaboration between America’s Promise Alliance and Pearson to increase high school graduation rates by encouraging statewide innovation and collaboration, sharing that knowledge and replicating what works, and developing successful models all states can replicate.

Join the GradNation Learning Community

To get more news about graduation rates and effective practices to increase them, join the GradNation Learning Community, a hub for sharing strategies and successful practices. Just send an email to [email protected] with your name, email address and organizational affiliation. To join the conversation on Twitter, use #GradNation.