An Evaluation of the Economic Benefits of a High School Education

This analysis identifies and quantifies the benefits to the local economy and society of high school graduation. The report also makes reference to data available for the center city school districts in Ohio’s eight large metropolitan areas—Akron, Canton, Cincinnati, Cleveland, Columbus, Dayton, Toledo and Youngstown.

Benefits pertaining to high school graduation can be divided into economic and fiscal benefits. Economic benefits have been identified as: higher individual income and consequent increases in economic productivity. Fiscal benefits have been identified as: increases in tax receipts, lower government transfers, and lower costs of incarceration.

Highlights of the fiscal benefits for taxpayers, as identified in the analysis, are:

• On average, high school graduates pay $564 more in taxes—$880, compared to high school dropouts who pay an average of $316 annually.
• High school graduates receive fewer government assistance payments for housing, food stamps, health care, unemployment and disability compensation, etc. High school graduates receive an average of $2,851, while high school dropouts receive an average of $5,091 annually, a net savings of $2,240 per high school graduate.
• High school dropouts form the majority of jail and prison inmates. The incarceration cost per capita is $2,806 for high school dropouts and $1,220 for high school graduates, resulting in a net government savings of $1,586 per individual who completes high school rather than dropping out.
• These annual fiscal costs associated with dropouts total $4,390 per dropout, or $548 per individual Ohio taxpayer (counting Ohio joint tax filers as individual taxpayers).
• After subtracting the cost of schooling, Ohio taxpayers can realize a lifetime net benefit of nearly $210,000 per high school graduate, a return of $11.62 for every $1 invested.

Economic benefits to individuals and to the state economy are even larger. They include:

• As a result of higher wages and higher employment, the per capita median earnings of high school graduates is $8,459 higher that of high school dropouts.
• On average, individuals who complete their high school education can realize a lifetime net benefit of over $470,000.
• With a total of 749,879 high school dropouts in the State of Ohio, the total economic loss to the state economy in terms of lost earnings due to this lack of education amounts to a total of $7.6 billion annually.

Because the magnitude of some costs and benefits could not be measured, they were omitted from this analysis. The results presented here are, therefore, conservative.