DECEMBER 21, 2011
Arizona’s economy would see huge boost by increasing postsecondary completion rates
WASHINGTON, DC – Cutting Arizona’s high school dropout rate in half would have tremendous benefits for the state’s economy. But as a new economic analysis released today by the Alliance for Excellent Education shows, cutting the dropout rate in half and ensuring that those “new graduates” meet national goals for postsecondary attainment creates new jobs, increases earnings for individuals, and boosts tax revenue for the state.
“Just crossing the finish line and earning a high school diploma is no longer enough in today’s global economy,” said Bob Wise, president of the Alliance for Excellent Education and former governor of West Virginia. “Today, a high school diploma must be the jumping-off point – the ticket to the additional education students need to compete for and land good-paying jobs.”
The likely benefits for cutting Arizona’s dropout rate in half for one class of dropouts would be tremendous, including as much as $91 million in increased earnings for individuals, 450 new jobs, and a $105 million increase in the gross state product. At the same time, however, the Alliance discovered that only 29 percent of Arizona’s “new graduates” would likely go on to earn a college credential or degree. Specifically, 16 percent would earn a vocational certificate, 9 percent would earn a two-year degree, and only 3 percent would earn a four-year degree.
Today’s analysis demonstrates the economic benefits if 60 percent of the Class of 2010’s “new graduates” had gone on to earn a college credential or degree. Of that 60 percent goal, the Alliance’s analysis includes the economic benefits if 34 percent of new graduates had earned a vocational certificate, 20 percent had earned a two-year degree, and 6 percent had earned a four-year degree. The resulting economic impacts would likely include $156 million in additional earnings – an increase of $65 million; and $114 million in increased spending – an increase of $42 million.
This additional money is not going under a mattress – it will be put to good use within the state by purchasing homes, automobiles, groceries, clothing, and more. The additional spending that those new graduates could do with their earnings would be enough to support as many as 800 new jobs and increase the gross state product by as much as $181 million, the study finds. This increased economic activity would likely result in $12 million in increased state tax revenue during a time when nearly every state’s budget is in dire straits.
“These economic benefits are for just one class of high school dropouts,” said Wise. “If Arizona could boost educational outcomes for each high school class over the next decade, the economic return would be tenfold.”
The data released today was derived from a sophisticated economic model that the Alliance, with generous support from State Farm®, developed with Economic Modeling Specialists Inc., an economics firm specializing in socioeconomic impact tools.
The click here to view complete analysis results.
