The Economic Burden of High School Dropouts and School Suspensions in Florida
Introduction
There is an immense amount of evidence on the economic and social value of educational attainment (Belfield and Levin, 2007; Lochner, 2011; Oreopoulos and Salvanes, 2011). The impact education has on earnings is well established. There is also extensive literature on the health advantages of having more education, and evidence on the social benefits of having a better educated population. One important and often overlooked benefit is that the gains from education are greater for minority and disadvantaged students; thus, education has the potential to narrow gaps in economic well-being (Hoxby and Turner, 2012). Many youth without a high school diploma will face a precarious economic future (Fernandes-Alcantara, 2012).
Despite this evidence, many students do not complete high school. Nationally, graduation rates have remained static over recent decades, with one-fifth to one-quarter of students failing to graduate on time. Moreover, high school graduation rates are much lower for minority students and low-income students, and for male students (Knapp et al., 2011, Table 7). Many high school graduates do not go to college—only two-fifths of 18-24-year-olds are in college—and many college students fail to complete a degree: the U.S. college graduation rate for four-year college students is just over one-half; at two-year colleges, the graduation rate is one-third (NCES Digest, 2012, Table 213). As with high school, college enrollment and completion rates are significantly lower for minority students and low-income students. These low rates are partly a result of students not being adequately prepared for college when they finish high school.
Hence, there is a strong economic case for increased investments to improve school quality and to ensure that students graduate from high school. This is especially true for disadvantaged students, many of many of whom are dealing with family disadvantages and other barriers that undermine their ability to complete high school. For these students, school policies and practices can be especially influential,
One such policy is school suspensions. Schools can and do suspend students for a number of reasons, from criminal behavior, such as bringing a weapon to school, to more minor offenses, such as swearing or “willful defiance” of teachers or administrators (Fabelo et al., 2011). School personnel have a lot of discretion in terms of how to manage student behavior, and they do have options preferable to out-of- school suspensions, such as in-school suspensions or mandatory intervention programs, such as Restorative Justice. Nevertheless, many students end up under the jurisdiction of the Department for Juvenile Justice.
In this paper, we calculate the economic consequences of high school suspensions in Florida. We do this by first estimating the economic losses resulting from high school dropouts in Florida and then by estimating the impact suspensions have on those dropouts. It is important to understand the full economic consequences of students failing to complete high school. There are fiscal consequences: tax revenues are lower and government spending is higher for dropouts; and there are social consequences: the state economy is adversely impacted by dropouts’ lower productivity and other negative factors, such as crime and poor health. We calculate both the fiscal and social impacts using a conventional lifecycle economic model. The initial step is to map the distribution of educational attainment across cohorts of Florida youth and government spending across the state. We then describe the economic model and how key components of the model are derived. The results of the model are expressed as the net gain to Florida taxpayers and Florida residents if high school dropouts instead completed high school. It is then possible to simulate the gains that would accrue if education policies and high school suspension practices were more effective and the high school completion rate in Florida were higher.
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