According to the Alliance for Excellent Education, dropouts are “far more likely than graduates to spend their lives periodically unemployed, on government assistance, or cycling in and out of the prison system,” all of which has a negative economic impact on the community at large. A 2009 study conducted by Northeastern University found that 10 percent of male high school dropouts were in jail or juvenile detention. And according to the Vera Institute of Justice, the average cost of incarcerating a single inmate was more than $31,000 in 2010. In some geographic areas, that figure balloons to more than $60,000. Their 2012 report also notes that there are collateral costs associated with an inmate’s imprisonment, such as the need for increased social services and child welfare.
The U.S. recession that began in 2007 had a particularly severe impact on high school dropouts. While the 2011 unemployment rate for high school graduates was deemed high at 9.6 percent, for dropouts that rate was 14.3 percent. Unemployment costs to individual states and the nation as a whole have skyrocketed in recent years. The cost of state and federal unemployment benefits exceeded $150 billion in 2010.
The high unemployment rate among high school dropouts can also mean increased medical expenses. As former employees lose benefits, they may need to rely on supplemental care. In a 2013 analysis conducted by the Maclver Institute for the state of Wisconsin, author Christian D'Andrea noted that high school dropouts were more likely to have health problems, and they were also less likely to have the means to pay for medical expenses. According to D’Andrea, the state of Wisconsin lost $150 million due to increased Medicaid costs.
It’s not just the cost of propping up high school dropouts that has an adverse affect on the economy. Lack of contribution to consumer spending also has negative economic implications. High school dropouts are less likely to be homeowners or spend money on a host of other items that their more educated peers can afford. The more an employee makes, the more taxes he adds to the state and federal coffers. Higher wage earners also spend more on everything from groceries to luxuries to homes, thereby increasing the overall health of the economy.