Montana's High School Dropouts: Examining The Fiscal Consequences. State Research.pdf

Montana's high school dropouts have significant fiscal consequences, including lower personal income and state tax revenue, poorer health status and increased health expenditures, and higher state incarceration costs. According to the U.S. Census Bureau's Current Population Survey, about 6% of Montana's population between 20 and 65 years old are high school dropouts, roughly 37,000 people. The average labor market outcomes by educational attainment show that high school dropouts have lower average annual earnings, around $18,000, compared to high school graduates, around $25,000, and those with some college or a bachelor's degree, around $35,000 to $50,000. The estimated total present value of lifetime earnings for high school dropouts is around $283,000, compared to around $373,000 for high school graduates and around $633,000 for those with a bachelor's degree. The fiscal impact of Montana's dropouts on personal income and state tax revenue is estimated to be around $49 million in lost tax revenue annually. Additionally, high school dropouts are more likely to participate in Medicaid and have poorer self-reported health quality, resulting in higher state Medicaid expenses, estimated to be around $13 million annually. The potential annual savings of high school graduation to state incarceration costs is estimated to be around $3 million. Overall, reducing the high school dropout rate in Montana could result in significant cost savings to the state.