Modeling the Economic Effects of Increased Drop-out Rates from High School

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https://www.copsmodels.com/ftp/workpapr/g-321.pdf

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http://hdl.handle.net/11603/23132

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UMBC Economics Department
UMBC Faculty Collection

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Date

2021-09-02

Type of Work

research papers
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Citation of Original Publication

Dixon, Peter B.; Rimmer, Maureen T.; Farrow, Scott; Modeling the Economic Effects of Increased Drop-out Rates from High School; CoPS Working Paper No. G-321, 2 September 2021; https://www.copsmodels.com/ftp/workpapr/g-321.pdf

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Subjects

covid and high-school drop-out rates
dynamic model of student numbers
educational attainment of workforce
cost of reduced high-school graduation rates

Abstract

With Covid, high-school students are having difficulty staying in school. We present a dynamic model of the effects of increased drop-out rates. The model accounts for labor productivity, crime costs and high-school savings. We simulate a 25 per cent increase in drop-out rates occurring in the two years starting September 2019, with a gradual return to pre-Covid rates in 2025. Our results show a loss of 597,000 high-school graduations from cohorts entering high-school in 2016-2024. The present-value cost is between $42 and $137 billion, depending on discount rates. These results support investment in high-school retention policies through the Covid crisis.