Assessing the Labor Market, Earnings, Income, Social, Civic, Health and Fiscal Consequences of Dropping Out-of-School to the Dropouts Themselves and to Society at Large in the State of Michigan

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Assessing the Labor Market, Earnings, Income,
Social, Civic, Health and Fiscal Consequences of
Dropping Out-of-School to the Dropouts Themselves
and to Society at Large in the State of Michigan

• Andrew Sum
• Center for Labor Market Studies
• Boston, Massachusetts
• Prepared for
• C.S. Mott Foundation
• Michigan

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• Key findings of Michigans Recent High School
  Graduation Tracking System. The longitudinal,
  individual student-based measures of four year
  on-time graduation rates for public school
  students at the state and high school district
  level this methodology used by 16 states in
  reporting four year graduation rates for the
  Class of 2007 was recommended by the U.S.
  Congress in its passage of the No Child Left
  Behind legislation
• Strengths A student based ID system for
  tracking high school students across the state
  through graduation the enrollment status of
  students not graduating on-time can be tracked
  the system can yield five year and six year
  graduation rates on-time graduation rates can be
  estimated for gender, race-ethnic, income,
  special education, and limited English
  proficiency subgroups of students.

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National Governors Association Graduation Rate
Compact Formula

• of students in a given cohort who graduate in 4
  years or less
• of 1st time entering 9th graders in 2003-2004
  - transfers out transfers in
• The statewide graduation rate for Michigan Class
  of 2007 was 75.4

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Four Year On-Time Graduation Rates for Michigan
High School Students, Freshman, Class of 2003-2004
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Four Year On-Time Graduation Rates for Michigan
High School Students, in Selected School
Districts, Class of 2003-2004
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Ranking of Four-Year Cohort Graduation Rates in
Eight States That Have Released Graduation Rates
Based on the National Governors Association's
Compact Rate, 2006-2007
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Why We Should Care About High School Dropout
Problems in Michigan and the U.S.

• There are serious negative labor market and
  income problems for dropouts themselves over
  their entire working lives substantially reduced
  employment and earnings opportunities, especially
  for men these gaps have been widening over time
• The dropout population reduces the future size
  and quality of the states resident labor force,
  thereby limiting our economic growth potential
• Dropping out has adverse effects on two parent
  family formation and on the cognitive, economic,
  social, and physical well-being of the children
  in their families

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• Negative impacts on family poverty and income
  inequality
• Negative impacts in physical and mental health,
  disability rates
• Reduced civic engagement and participation in
  civic affairs
• Increased incarceration rates among young
  dropouts
• Adverse fiscal consequences of dropouts upon
  local, state, and federal budgets

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The Types of Measures Included in Our Study of
the Economic and Social Consequences of Failing
to Graduate from High School

• Labor market outcomes (employment and earnings on
  a monthly, annual, lifetime basis)
• Income outcomes (poverty, near poverty, low
  income status)
• Health outcomes (health status, health insurance
  coverage, disability status)
• Family outcomes (marriage rates, out-of-wedlock
  childbearing, well-being of children)
• Civic outcomes (voting behavior, volunteerism)
• Criminal justice outcomes (Incarceration rates
  costs)
• Fiscal outcomes in terms of taxes paid and cash
  and in-kind benefits received

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Negative Labor Market Outcomes Associated with
Being a High School Dropout

• Labor market outcomes
• Lower rates of labor force attachment
• Lower employment rates
• Lower weekly wages
• Lower annual earnings
• Lower lifetime earnings
• Reduced employee benefits health insurance and
  pension coverage

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Key Findings on Employment Rates Across
Educational Groups

• Employment rates of high school dropouts 16-19
  years old in Michigan are substantially below
  their 16-19 year old peers who graduate from high
  school.
• The employment rate gaps between these two
  educational groups persist over their working
  lives 16-64 year old dropouts in Michigan had an
  employment rate that was 20 percentage points
  below high school graduates 16-64 years old and
  36 percentage points below bachelor degree
  holders.
• Employment rates of high school dropouts peak in
  their early 30s they begin to withdraw from the
  labor market much sooner than their better
  educated peers.

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Employment to Population Ratios of Out of School
16 to 19 Year Olds by Educational Attainment in
the U.S., and the State of Michigan, 2005-2006
Average (in )
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Employment/Population Ratios of 16-64 Year Old
Michigan Adults by Educational Attainment in 2006
(in )
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Percentage Point Gaps Between the E/P Ratios of
Michigan and U.S. Males by Educational
Attainment, 2006
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Percent of 18-64 Year Old Michigan Adults with No
Paid Work Experience by Educational Attainment
During 2006
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Mean Annual Earnings of Adults (16-64) in
Michigan During 2005-2006
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Trends in the Real Mean Lifetime Earnings of
Michigan Adults by Gender and Educational
Attainment, Selected Years 1979 to 2006 (in
Constant 2006 Dollars)
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Mean Lifetime Earnings of Michigan Adults from
Ages 18-64 by Educational Attainment, Both
Genders Combined, 2005-2006 Cross Sectional
Snapshot
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Percentage Point Changes in the Mean Lifetime
Earnings of Michigan Adults Ages 18-64 by
Educational Attainment, Both Genders Combined,
1979 to 2006
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Percent Changes in the Mean Lifetime Earnings of
Michigan Males 18-64 Years Old by Educational
Attainment, 1979 to 2006
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Poverty Rates of Michigan Adults 18-64 Years Old
By Educational Attainment, 2006 (in )
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Trends in the Poverty/Near Poverty Rates of
Michigan Adults 18-64 Years Old By Educational
Attainment, 1979-2006
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Mean Expected Lifetime Years in Poverty/Near
Poverty Among Michigan Adults from Ages 18-64 by
Educational Attainment, Both Genders Combined,
2006
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Trends in Marriage Rates Among 20-64 Year Old
Native-Born Males in Michigan and the U.S. by
Educational Attainment, 1980-2005/06 (In )
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Percent of New Births to Michigan and U.S. Women
(15-50 Years Old) That Were Out-of-Wedlock by
Educational Attainment of Mother, 2006 (ACS)
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Percent of Michigan and U.S. Families with
Children that Were Headed by A Single Parent by
Educational Attainment of Family Head, 2006
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Percent of 18-64 Year Old Adults in Michigan and
the U.S. Reporting Their Health Status as Only
Fair or Poor, March 2005-March 2006 Average
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Percent of 16-60 Year Old Disabled Adults in
Michigan and the U.S. Who Self-Reported a
Disability by Educational Attainment, 2006
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Percent of Voting Eligible Adults (18 and Older)
Who Voted in the November 2004 Election by Level
of Educational Attainment, Michigan versus U.S.
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Institutionalization Rates of 18-34 Year Olds in
Michigan by Gender and Educational Attainment,
2006 (in )
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A Listing of the Income, Payroll, Sales, and
Property Tax Payments to the Federal Government
and State and Local Governments
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Mean Annual Tax Payments of 16-64 Year Old Adults
in Michigan and the U.S. by Educational
Attainment, 2004-2005 Averages (in )
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A Listing of the Cash and Non-Cash Transfers
Received by Individuals or Households
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Percent of 16-64 Year Old Michigan Adults
Receiving EITC Payments, Food Stamp Benefits, or
Medicaid Benefits by Educational Attainment, 2005
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The Mean Net Annual Fiscal Contributions of 16-64
Year Olds in Michigan and the U.S. by Educational
Attainment, Annual Averages, 2004-2005 (in )
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Percent of 18-39 Year Olds in Michigan and the
U.S. Who Were Poor or Near Poor by Educational
Attainment, 2006-2007 Averages
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Percent of 18-39 Year Olds in Michigan Who Were
Poor/Near Poor by Educational Attainment,
2006-2007
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The Mean Annual Earnings of Native Born 18-39
Year Olds in Michigan During the 2006-2007 Period
by Educational Attainment, All and by Gender
(includes zero earners)