Executive Summary
In recent decades, Georgia has prospered in an economy that increasingly valued education, despite having among the lowest rates of high school completion of any state in the nation. To do so Georgia has come to rely on the in-migration of well-educated individuals from other states. However, the economic prosperity has not benefited native Georgians to the same degree. The state and its citizens continue to bear the considerable costs associated with lower educational attainment among Georgia’s native born population.
This study documents the public costs of high school dropouts in Georgia, and examines how policies that increase school choice, such as the recently-enacted tuition tax credit scholarship program will provide large public benefits by increasing public school graduation rates. The study calculates the annual cost of Georgia dropouts caused by reduced tax revenue, as well as increased Medicaid, public assistance and incarceration costs, and documents the employment impacts that dropouts have on the Georgia economy. It then examines how competition from private schools already raises public school graduation rates, and calculates the dollar value of the public benefits that result from Georgia’s increased public school graduation rates generated by a modest school choice program.
Key findings include:
ü Georgia residents who were born in the state are twice as likely to be high school dropouts and one-half less likely to have a college degree as residents who have moved to Georgia from another state.
ü Each Georgia dropout costs the state about $2,455 each year after they leave school, and for the remainder of their lives.
ü More than 38,000 Georgia students in the class of 2007 failed to graduate from high school. The state’s overall graduation rate is about 65 percent, among the lowest graduation rates of any state in the nation.
ü On average, each of Georgia’s more than 760,000 working-age dropouts earns $7,200 less annual income compared to high school graduates, totaling $5.5 billion.
ü The annual public cost associated with Georgia’s more than 760,000 working-age dropouts is about $1.8 billion.
ü Each new class of dropouts produces public costs of $95 million every year for the rest of their lives, or about $2,455 per dropout.
ü Over an expected lifetime of 50 years, one year’s class of dropouts will cost Georgia taxpayers $4.8 billion.
ü Our cost estimates only include costs associated from four sources: lost revenue from taxes and fees, increased Medicaid, public assistance and incarceration. Because dropouts also incur other public costs, the true public cost is larger than $2,455 per dropout per year.
ü A school choice policy improves public school graduation rates and produces millions in public savings.
ü School choice policies increase the graduation rates of program participants.
ü School districts respond to competition if more students enroll in private schools. As a result, public schools produce higher graduation rates. Georgia students benefit from increased competition from private schools.
ü The beneficial effect of private school competition on Georgia public schools is large enough that even a modest school choice program, one that increased private school enrollment by 6.8 percentage points, would reduce the number of public school dropouts by 5,490 students per year, saving Georgia citizens about $13.5 million per year by increasing tax revenue, decreasing Medicaid, public assistance and incarceration costs.
ü The total savings from preventing 5,490 students from dropping out, over an expected lifetime of 50 years, would be $674 million.
For the complete study, visit http://www.gppf.org/pub/education/DropoutStudy.pdf.