High school dropouts face steep costs in U.S.

New OECD report shows economic impact of failing to finish school

From eSchool News staff and wire service reports
September 14, 2006
Dropping out of high school has its costs around the globe, but nowhere steeper than in the United States.
Adults who don't finish high school in the U.S. earn 65 percent of what people who have high school degrees make, according to a new report comparing industrialized nations. No other country had such a severe income gap.

Adults without a high school diploma typically make about 80 percent of the salaries earned by high school graduates in nations across Asia, Europe, and elsewhere. Countries such as Finland, Belgium, Germany, and Sweden have the smallest gaps in earnings between dropouts and graduates.

The figures come from "Education at a Glance," an annual study by the Paris-based Organization for Economic Cooperation and Development (OECD). The report, released Sept. 11, aims to help leaders see how their nations stack up.

The findings underscore the cost of a persistent dropout problem in the United States. It is rising as a national concern as politicians see the risks for the economy and for millions of kids.

The new report says 44 percent of adults without high school degrees in the United States have low incomes--that is, they make half of the country's median income or less.

Only Denmark had a higher proportion of dropouts with low incomes.
Also, the United States is below the international average when it comes to its employment rate among adults age 25 to 64 who have no high school degree.

Even U.S. adult education and job training do little to close gaps, because too few dropouts take part, said Barbara Ischinger, director of education for the OECD.

"Those with poor initial qualifications remain disadvantaged throughout their life, because they have fewer opportunities to catch up later on," she said.

About one-third of students in the United States don't finish high school on time--or at all. Estimates on that dropout rate vary, though, and state data are often shaky.

The importance of a high school degree on income varies across nations. It depends on the demands for skills, the supply of workers, minimum-wage laws, and the strength of unions.

The disparity is more pronounced in the United States, Ischinger said, partly because the U.S. labor market is more flexible. Other nations protect people with weak education qualifications through regulations or tax systems that favor the low skilled, she said.

On the other end of the spectrum, however, the United States more richly rewards those who go to college.