Two professors have cracked the nut of an old problem: How do you perform a cost-benefit analysis on education?
Henry M. Levin and Clive R. Belfield examined the public costs of a high school dropout on Minnesota taxpayers, then looked at the cost of programs that boost high school graduation rates. Voila: a positive cost-benefit ratio.
Levin, a professor at Columbia University, and Belfield, an assistant professor at Queens College, presented “Investments in K-12 Education for Minnesota: What Works” on Monday at an education summit sponsored by Growth and Justice, a Minnesota think tank that focuses on the state’s economy.
The bottom-line difference for the public purse between high school graduates and dropouts is stark. Over a working life of 45 years, each dropout costs taxpayers an extra $252,000 – paying $167,000 less in taxes and costing $48,900 more in health care, $31,800 more in the justice system and $4,100 more in state assistance programs.
There is no shortage of dropouts. Nearly 10,000 students leave Minnesota schools each year without a high school diploma. The authors show that Minnesota’s 87 percent graduation rate is one of the highest in the country. However, our graduation rates for African Americans (59 percent), Hispanics (50 percent) and Native Americans (57 percent) are not much higher than national averages for those groups.
The authors looked at programs and strategies that reduce the number of dropouts. Using only programs with known costs and results, they found:
* Increasing teacher salaries by 10 percent raises high school graduation rates 5 percent. The cost for each additional graduate is $56,850. The benefit-cost ratio is 4.01.
* Reducing class size in elementary schools increases high school graduation by 11 percent for all students and 18 percent for low-income students. The cost for each additional graduate is $116,720 across the board, but only $71,330 for low-income students. The overall benefit-cost ratio is 1.96, but 3.21 for low-income students.
* First Things First, a program that emphasizes small learning communities, long-term teacher student relationships, mentoring and a rigorous curriculum, increases graduation rates by 16 percent. The cost for each new graduate is $33,680, the benefit-cost ratio 6.72.
* Talent Development targets the transition between 9th and 10th grades and has increased graduation rates by 8 percent. It includes small learning communities, help sessions and advanced curricula. The cost for each additional graduate is $34,850, the benefit-cost ratio 6.56.
* Check and Connect is a program to assess and mentor at-risk students. It increases the graduation rate by 17 percent. The cost for each additional graduate is $47,930, the benefit-cost ratio 4.77.
The authors disqualified many other dropout prevention programs because their effectiveness has not been fully documented or there isn’t enough information on costs.
At Monday’s Growth and Justice conference, Belfield pointed to the $252,000 figure and added to it the $475,900 more graduates will earn over dropouts. “One high school dropout leaves half a million dollars on the table,” he said.
Rep. Mindy Greiling, chairwoman of the Minnesota House K-12 Education Finance Committee, said the paper, as well as other cost-benefit analysis presented at the Growth and Justice conference, makes a strong case for more school funding.
“There are a lot of nay-sayers on school funding,” she said. “They say we have to have accountability for more funding. With this information, we can plow ahead and get legislators to vote with us for education. The programs work; it’s political will we have to work on.”