Modeling the Economic Effects of Increased Drop-out Rates from High School
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2021-09-02
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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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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.