The economics of drop-out rates in Texas

June 05, 2012

The U.S. Department of Education puts the Texas graduation rate at 71.9 percent — ranking the state 36th nationally. That would put the dropout population for each year’s graduating class at roughly 130,000 — or about the size of McAllen. Another estimate, using a formula called the Cumulative Promotion Index, indicates only 64.5 percent graduate in four years.

A 2009 study of the state’s dropouts, from the Bush School of Government and Public Service at Texas A&M University, went beyond figuring dropout rates to quantifying the consequences, both for individuals and the Texas economy.

A high school dropout will likely make poverty-level wages of about $14,500 yearly — about $7,000 less than a graduate with no college, a gap likely to remain or widen over time.

The big picture: dropouts subtracted between $5 and $9 billion annually from the gross state product of about $1.2 trillion, according to the study, which examined probabilities of employment, wages and government aid received, calculating the economic chasm between those who graduate and those who don’t.…

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