Budget & Tax , Education

Greg Forster, Ph.D. | February 23, 2015

The High Cost of Oklahoma's Dropouts

Greg Forster, Ph.D.

If public schools lose 60 students total because of a school choice program, the education establishment will do everything it can to put a stop to it. But Oklahoma public schools lose 60 students every day as dropouts. The annual cost to taxpayers is a staggering $800 million—each and every year.

In Oklahoma, more than 10,500 students fail to graduate in every high school class. That’s more than 60 dropouts on every single school day. More than 53,000 students failed to graduate in the five years between 2006 and 2010.

The personal costs of these educational failures are enormous, but so is the social cost to all Oklahomans. Dropouts are much more likely to be dependent on public programs, pay less in taxes, and commit crimes. A conservative estimate puts the public costs of Oklahoma’s dropout problem at almost $800 million every year.

If public schools lose 60 students total because of a school choice program, the education establishment will pull out all the stops to do something to put a stop to it. But Oklahoma public schools lose 60 students every day as dropouts. And what does the establishment do? They keep demanding the same old “solutions” that have failed to produce any results for children over the 50 years we’ve tried them.

Students who leave public schools through school choice are leaving in search of a better education. Students who drop out are in search of no education. They have concluded—on the basis of what “education” looks like in their public schools—that education isn’t worth their time.

With school choice, the establishment howls about even a dollar being “lost” from the government school system because parents were put in charge. How about the billions of taxpayer dollars lost because the schools the establishment is so eager to protect from reform fail so many thousands of children? When anything other than school choice is on the table, money is no object. The solution is always to dump more taxpayer funding into the same broken government school system that has already squandered so many trillions of dollars in funding increases.

The math behind these numbers is pretty dismal. The U.S. Department of Education reports that Oklahoma’s averaged freshman graduation rate was 78.5 percent in 2009-10, the most recent year for which it reports state-level figures. The national rate was 80 percent, so Oklahoma is a little behind the country as a whole. (The fact that these figures are five years old is a reflection of the current administration’s attitude about transparency; a decade ago these sorts of figures were available with a much shorter lag.)

Oklahoma graduated 38,503 students in 2009-10. Arithmetic tells us that this implies 10,545 additional students ought to have graduated that year, but didn’t. There is a small amount of error in that figure; thankfully, children are not (yet) implanted with tracking chips to allow the federal government to monitor their movements with complete precision. But the “averaged freshman graduation rate” is a good calculation based on reasonably solid data.

Go back over the previous five years and you’ll find Oklahoma’s graduation rate has been pretty stable. It was 77.8 percent in 2005-06.

Run the numbers on graduates and graduation rates for each of those years and you’ll get a total dropout count of 53,089.

How much does it cost Oklahoma that its schools fail so many students every year? A total account of costs to the general public would be more than we could calculate. Who can estimate the value of the innovations that were never created? How do we measure the lost formation of character, cultural literacy, and good citizenship?

Taxpayer costs are only a small part of the costs of dropouts, but they are more easily calculable. High school dropouts are consistently more likely to use a variety of government assistance programs. Because they make lower salaries, they also pay less in taxes. So costs go up and revenues go down. Dropouts are also more likely to commit crimes and go to prison. The personal costs to crime victims are, again, hard to calculate. But the costs of incarceration we can estimate reasonably well.

Some scholars place the taxpayer cost of dropouts very high. In 2012, a team of researchers led by Clive Belfield of Queens College estimated the costs at $235,000 per dropout. That number is on the high side. One reason is that the research it was based on focused on the most disadvantaged youth, whose costs will be higher. Youth in the category Belfield looked at represent about 17 percent of young people, whereas about 20 percent of young people actually drop out nationally, and 22 percent in Oklahoma. Moreover, Oklahoma’s dropouts may be less disadvantaged than the populations Belfield focused on.

To be safe, in estimating the cost of Oklahoma’s dropouts I have relied on a more conservative figure. Last year, Michael McShane of the American Enterprise Institute reported in the journal National Affairs a calculation he had produced along with Patrick Wolf of Georgetown University. McShane and Wolf place the cost at $90,000 per dropout. (As with Belfield’s figure, this is what economists call the “present value” of each dropout’s additional costs over an expected lifetime.)

Then, to be even more safe, I adjusted the figure for Oklahoma’s local economic conditions. McShane and Wolf’s figure is for the nation as a whole. Sperling’s Best Places estimates the cost of living in Oklahoma is 84.2 percent of the national average, so I went with a cost estimate of $75,780 per dropout in Oklahoma. While this is a rough method, it increases the safety of the estimate. I am unlikely to be overestimating the taxpayer costs of Oklahoma dropouts.

Multiply taxpayer costs of $75,780 per dropout by Oklahoma’s 10,545 dropouts per year, and you get a grand total just a bit shy of $800 million. That’s each and every year. The total cost of those 53,089 dropouts over the last five years is a staggering $4 billion.

The good news is, we do know of an effective solution. A 2010 study found that among students who applied for school vouchers in Washington, D.C., those who got vouchers had a graduation rate of 82 percent while those who lost a lottery and didn’t get vouchers had a graduation rate of 70 percent. A 2012 study found that students using vouchers in Milwaukee were more likely to graduate from high school and also to enroll in college.

School choice doesn’t just help the students who leave public schools, it helps the students who stay. School choice changes the game for public schools, confronting them with the need to improve lest they lose their students. That’s why 22 out of the 23 empirical studies on this subject find school choice improves public schools.

If we want fewer students to drop out of schools, we will need to help more of them leave school in another way—to seek an education that is worth sticking around for.

Greg Forster, Ph.D.


Greg Forster (Ph.D., Yale University) is a Friedman Fellow with EdChoice. He has conducted numerous empirical studies on education issues, including school choice, accountability testing, graduation rates, student demographics, and special education. The author of nine books and the co-editor of six books, Dr. Forster has also written numerous articles in peer-reviewed academic journals, as well as in popular publications such as The Washington Post, The Wall Street Journal, and the Chronicle of Higher Education.

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