High school students generally drop out because of the effects of abuse, poverty, emotional issues, cognitive deficiencies and lack of support. College students are more likely to drop out due the impact of declining mental health, financial issues or the readiness to begin their professional career. The job market has grown tremendously competitive therefore the economic effects of dropping out of high school or college are more severe now than ever.
|A lack of a high school diploma or college degree can reduce your earning potential.|
Students who drop out of high school or college are often restricted to positions with lower pay and are trapped in dead end jobs. They also more likely start at the very bottom of the career ladder since many upper-level positions require specialized skills and evidence of education. A study conducted in 2006 by the U.S. Bureau of the Census reports that high school dropouts earned an average of $17,299 annually compared with $26,933 earned annually by high school graduates. Marguerite Kondracke, president and CEO of America's Promise states that “Each year dropouts represent $320 billion in lost lifetime earning potential.” Unfortunately employees with only basic skills are viewed as expendable. Since many dropouts do not have specialized skills and are at the entry level positions, consequently, they are also more vulnerable to more frequent and longer instances of unemployment. The U.S. Department of Labor revealed in 2003, that high school dropouts have a 72 percent greater chance of being unemployed than high school graduates. Unless the dropout obtains education or learns a valuable skill, he runs the risk of being limited in his professional growth. Lower wages can cause dropouts to accrue massive debt, depend on government assistance, become the target of fraudulent businesses and live paycheck to paycheck. Many are a few paychecks away from being homeless and unable to support themselves. The lack of funds limits the amount of money that could be used to invest, start a lucrative business and save for the future, continues the cycle of poverty. In effect, upward economic mobility is severely stunted.
|The high demand for advanced skills such as computer engineering excludes dropouts from the job market.|
The skills gap between graduates and dropouts is substantial unless the former student acquired skills or developed his talent outside the classroom. Many upper-level professional careers require a combination of computer skills, the ability to teach, critical thinking skills, the capability to analyze complex text and/or apply theories. Since many drop outs lack in these skills this has a mass negative effect on U.S. productivity and global competitiveness. Finding qualified employees is often a major source of frustration and concern for companies. Andersen from the National Association of Manufacturers reports, “Experts project that, recession or not, by 2020 the U.S. will face a dramatic shortage of employees with the kind of skills necessary for U.S. business to compete in a complex, technology-drive global market. Experts also agree that we will face a labor shortage that may make the 1990s pale by comparison.” Many of these skills can only be nurtured during high school and college. The external motivation, honest feedback and competition in a classroom setting are conductive for encouraging students to attain the highest skill level. Also many industries need proof of skills through a degree and certifications. Those who drop out may never get the hands-on experience needed to learn these skills and obtain such a position. This phenomenon further perpetuates the wage gap between diploma and degree earners and dropouts.
|College teaches students business etiquette, professionalism and networking techniques.|
Diminished Networking Opportunities
Once a student drops out of high school or college, the chances of connecting with like-minded individuals, attaining mentors or networking with industry leaders are reduced. The best method to gaining opportunities is through visibility and making a quality impression on the people you have relationships with. Kevin Fogarty in “Hired! Landing a Job in Today’s Finance Industry” states, “Nothing is better than a personal reference to make a candidate credible to a potential employer or point a candidate to an opening that might not have been advertised.” School offers students the chance to practice social interaction with academics and professionals. Dropouts lose the opportunity to learn characteristics employers value which decrease their knowledge on how to be an attractive candidate for employment, inclusion in networks or venture capital. If these former students have no exposure then industry leaders and potential employers have no chance to experience the dropout’s possible stellar talent, glowing personality or specialized skills. For example, students are able to obtain internships, that are not widely advertised, through their high school or college. Students get the chance to showcase their skills and turn the internship into a prestigious full-time job. Many drop out of school due to lack of support or positive role models at home. However school can provide a positive role model and well-informed adviser. School also provides the platform to form friendships with knowledgeable motivated students that lead others to opportunities. Also, many profitable companies began with educated friends who decided to pool their skills together on a start-up.
Costs and Benefits to Society
High school and college dropouts have a higher chance of feeling depressed and hopeless about their situation and turning to destructive coping mechanisms or survival techniques. This can lead to unsavory behavior such as drug use, criminal activity, alcoholism, unhealthy habits and unwanted pregnancies. These destructive habits can have major economic costs to society. The Center for Labor Market Studies found in 2009 that high school dropouts were 63 times more likely to be institutionalized than college graduates. Wall Street Journal notes that high school dropouts make up 75 percent of state prison inmates. State budgets can be drained by funding for entitlement programs. The report “Decreasing Health Care Costs by Increasing Educational Attainment,” explains that if the 2006 high school students had graduated then the U.S. could had saved $17 billion in Medicaid and expenditure in these youth’s lifetime. States with a large amount of high school dropouts have more difficult time attracting business, research companies and increasing productivity. For example research by Cecilia Rouse, professor of economics of public affairs at Princeton University shows that if the high school dropouts would had graduated, Colorado’s economy would had grown by $4.2 billion and California by $40 billion.
In some instances dropping out of school can result in individual wealth and pump billions into the economy through entrepreneurship. The lack of opportunities and safety net from dropping out of school can spur innovative ideas and motivate dropouts to start a meaningful business. The industry that a dropout may desire to obtain a position in may be restricted. Therefore the dropout may attempt to gain entry into the industry by creating their own opportunities through becoming a self-made expert and business owner. In other instances students may purposefully drop out of college to invest time in their start-up idea. Two examples of dropouts who became successful entrepreneurs, according to a CNBC report, include David Geffen, who founded Asylum Records, Geffen Records and co-founded DreamWorks, and Jack Taylor, who founded Enterprise Rent-A-Car. These entrepreneurs have provided billions of dollars worth of jobs and benefits to society through innovation.
- U.S. Bureau of the Census. (2006). Income in 2005 by educational attainment of the population 18 years and over. Table 8. Washington, DC: U.S. Government Printing Office.
- Fields, Gary (2008). The Wall Street Journal. The High School Dropout’s Economic Ripple Effect.
- Lehr, C. A., Johnson, D. R., Bremer, C. D., Cosio, A., & Thompson, M. (2004). Essential tools: Increasing rates of school completion: Moving from policy and research to practice. Minneapolis, MN: University of Minnesota, Institute on Community Integration.
- Andersen. (2001). National Association of Manufactures. The Skills Gap 2001.
- Fogtary, Kevin (2008). The Ladders. Hired! Landing a Job in Today’s Finance Industry.
- Sum, A., Khatiwada, I., McLaughlin, J., et. Al (2009). Center for Labor Market Studies. The Consequences of Dropping out of High School.
- Healthier and Wealthier: Decreasing Health Care Costs by Increasing Educational Attainment,‖ (Washington, DC: Author, 2006).
- Rouse, C. E. (2005). “Labor market consequences of an inadequate education.” Paper prepared for the symposium on the Social Costs of Inadequate Education, Teachers College Columbia University, October 2005.
- Deutsch, Donny. CNBC. The World’s Richest College Dropouts.