High school dropouts cost countries a staggering amount of money

Policies that cut school expenditures under the premise of “doing more with less” can also contribute to a decrease in high school graduation rates that could easily cancel out those savings. Shutterstock

High school dropouts cost countries a staggering amount of money

Recently, the Ontario government proposed educational reforms that collectively amount to savings of almost $1 billion, according to an analysis by the charity People for Education.

As a result of reforms, students will receive less attention in bigger classes in Grades 4 to 12 and have fewer targeted resources available to them due to a reduction of education grants. At the secondary level, students will find fewer course options or fewer class sections due to teacher loss while being required to complete a minimum of four mandatory e-learning courses.

The potential consequences of mandatory e-learning for students who already struggle in ordinary face-to-face classroom situations are particularly troubling. Longitudinal research suggests the level of individual support students receive from their teachers in high school is important to staying in school. Are the most vulnerable students being put at increased risk for dropping out?

School failure has profound economic consequences for individuals and society. While the purpose of education should never be reduced to promoting economic growth, every child out of school represents lost personal and social opportunities — and staggering economic costs — for countries.

Canada behind industrialized nations

High school completion rates have been steadily increasing in Canada and around the world for decades. Recent statistics indicate the “on-time” high school graduation rate across Canada is 79 per cent while the “extended-time” rate — students who needed up to an additional two years — is 88 per cent.

Yet particularly when we look at Canada in comparison to other industrialized nations, it’s clear Canada could improve. Japan and Finland boast a graduation rate of 97 per cent. Canada is currently fourth in the world at taking advantage of human capital but possesses relative areas of weakness in secondary education attainment rates for 15- to 24-year-olds when ranked internationally.

Differences in high school completion rates exist across Canada’s provincial and territorial education systems. For example, Alberta and Québec both have extended-time graduation rates of 83 per cent while Newfoundland, New Brunswick and Ontario boast rates of 94 per cent, 93 per cent and 92 per cent, respectively. These graduation rates should serve as important benchmarks to help monitor and evaluate educational reforms and hold provincial governments accountable for policy choices.

Graduation rates should serve as benchmarks for monitoring and evaluating educational reforms. (Shutterstock)

Estimating the costs

Economic and public policy estimates of the total cost of dropouts vary depending on the range of sectors examined and the methodologies used.

A comprehensive 2008 study of the cost of dropouts in Canada estimated impacts on labour, employment, health, social assistance and criminal justice systems to find if Canada increased its high school graduation rate by one per cent, the estimated savings would be over $7.7 billion annually. This study considered the estimated loss of private earnings, public tax revenues, employment revenue premiums and the cost of employment insurance. It also examined what are called “intangible costs” — the non-market effects of less schooling associated with reduced quality of life.

For Ontario, which possesses more than 40 per cent of the country’s student population, this $7.7 billion annual savings would amount to a relative share of more than $3 billion. It’s worth noting this conservative estimate was based on dollar amounts more than 10 years ago and the projection applies to only a one per cent increase in high school graduates.

U.S. research has indicated that in practical terms, $1 spent on education provides a lifetime benefit to society of $2. Each new graduate in the U.S. provides a net benefit to taxpayers of approximately US$127,000 over the graduate’s lifetime.

Collectively, this research suggests that the difference in high school completion rates between Canada and top industrialized countries such as Japan or Finland carry staggering economic costs.

Improving high-school completion

We can’t do justice to the wide range of factors that influence high school completion rates in this short review, but we offer some key education system features that are within policymakers’ control.

To reduce school failure, governments would be wise to invest in quality early years education that demonstrably reduces the need for later special education; provide additional support and funding aimed at bringing students into a successful school career when students are identified as being vulnerable or at risk; support curriculum and professional development to bolster culturally responsive teaching; avoid early tracking of students into different ability groups; ensure students are equitably directed to school choices; provide funding according to student needs, particularly for disadvantaged students and schools; in tandem with equitable and targeted support for all students’ academic achievement, including ensuring equal access to academic-track coursework, improve the quality of secondary vocational or apprenticeship courses.

It is important to remember that expenditures that lead to a one per cent increase in graduation rates may represent good value for money based on benefit-to-cost ratio calculations. On the other hand, policies that cut expenditures under the mantra of “doing more with less” can also contribute to a decrease in high school graduation rates that could easily cancel out those savings.