Oregon’s High School Dropouts Cost State $400 Million Annually

For release March 10, 2010

Cascade Policy Institute & Foundation for Educational Choice

Contact

Christina Martin, Education Policy Analyst
Cascade Policy Institute
503-242-0900
christina@cascadepolicy.org

Paul DiPerna, Research Director
Foundation for Educational Choice
317-229-2131
paul@edchoice.org

by Christina Martin and Paul DiPerna

PORTLAND—Oregon’s high school dropouts are costing state taxpayers more than $400 million per year, according to a study released today by the Foundation for Educational Choice and Cascade Policy Institute. On average Oregon’s dropouts number 218,000 annually—greater than the state and federal governments’ findings—underscoring the state’s need for more productive schooling options particularly during tough budgetary and economic times.

The study, Oregon’s High School Dropouts: Examining the economic and social costs, finds that Oregon’s dropout rate is resulting in more enrollments in the state’s Medicaid program, higher incarceration rates, and lost state revenue (because of unemployment and lower taxable incomes).

“Oregonians are paying too high of a price for underperforming public schools,” said Robert Enlow, president and CEO of the Foundation for Educational Choice. “The enormous cost of these lost opportunities is proof that Oregonians need to upend the status quo of educational failure and try something different like parental school choice.”

Key findings of the report include:

• Oregon’s graduation rates are somewhere between 65 percent and 75 percent, a far cry from the 95 percent historically reported by the state and federal governments.
• On average, Oregon’s working-age dropouts earn $10,000 less a year than high school graduates and far less than college graduates.
• Approximately $173 million in tax revenue is lost each year because of high school dropouts’ decreased earnings.
• Oregon’s dropouts are significantly more likely than high school graduates to require Medicaid assistance. More than 40 percent of high school dropouts receive Medicaid benefits, costing the state more than $200 million in annual Medicaid costs.
• Oregon’s current graduation rate leads to more than twice as many inmates as there would be if the state’s graduation rate were 100 percent, costing the state $37 million annually.

“These findings make clear the high cost of failure in our traditional public school system’s ‘one size fits all’ approach,” said Cascade Policy Institute policy analyst Christina Martin. “Oregon needs to embrace more innovative educational options that boast higher graduation rates.”
“This study shows the incredible savings Oregon could realize if its graduation rates were improved,” said Emily House, the report’s author. “The current results are undeniably costly for high school dropouts and Oregon’s taxpayers as well.”

To download the full study, click here.

About the Cascade Policy Institute

Founded in 1991, the Cascade Policy Institute is a nonprofit, nonpartisan public policy research and educational organization that focuses on state and local issues in Oregon. Cascade’s mission is to develop and promote public policy alternatives that foster individual liberty, personal responsibility and economic opportunity. Cascade promotes property rights, incentives, markets and decentralized decision-making. Cascade advances these values by sharing its research with the public, the media, and state and local lawmakers through publications, educational programs, community forums and special events.

About the Foundation for Educational Choice

The Foundation for Educational Choice is solely dedicated to advancing Milton and Rose Friedman’s vision of school choice for all children. The Foundation for Educational Choice is the continuation of the Milton and Rose D. Friedman Foundation, established by the Friedmans in 1996 to promote school choice as the most effective and equitable way to improve the quality of K-12 education in America.