A high school diploma is touted as the bare minimum students need to achieve. And now a new study pegs the financial value of high school graduation to the Austin region’s economy.
The Alliance for Excellent Education, a Washington DC-based non-profit focused on improving national graduation rates, has released a study detailing the effects on Austin’s regional economy if the amount of high school dropouts was cut in half – with benefits reaching into the millions.
It’s estimated that in the Austin-Round Rock Metropolitan Statistical Area (MSA), some 6,100 students dropped out of the class of 2010. Home to 45 schools, the Alliance says the region is one of the lowest performing in the nation, with 28 percent of high school students failing to graduate on time and with a regular diploma.
But what if that number was cut in half? Those 3,050 extra graduates would earn up to $38 million more annually than they would without a diploma, the Alliance finds. With that extra income, those grads would be able to spend an estimated $28 million extra, and invest an additional $10 million. The group would ultimately spend an extra $59 million on home purchases, and $2.4 million annually on vehicles.
This influx of spending would be enough to support as many as 300 new jobs, and would expand the MSA’s gross regional product by as much as $52 million, once those new graduates were firmly settled in their career fields. The increased wages and spending of the group would generate an additional $3.4 million in local tax revenue during an average year.
Nationally, more than 7,000 students drop out of high school every day, meaning over a million students don’t graduate each year.
As of January 2011, the unemployment rate of high school dropouts was more than twice the rate of those who had graduated. However, the Alliance emphasizes that graduating is not just beneficial to the students, but also to the surrounding community.
“In doing the economic analysis, most individuals seem to understand that when an individual earns a high school diploma, their future prospects in terms of salaries, employment, and other life prospects will be better than someone who did not earn a diploma,” says Alliance Director of Communications Jason Amos. “What we really wanted to show was the impact high school graduates have on their community. Not only does the graduate benefit, the community benefits as well.”
You can read The Alliance for Excellent Education’s report online.