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Andrew Sum Center for Labor Market Studies Boston, Massachusetts Prepared for: C.S. Mott Foundation Michigan

Assessing the Labor Market, Earnings, Income, Social, Civic, Health and Fiscal Consequences of Dropping Out-of-School to the Dropouts Themselves and to Society at Large in the State of Michigan. Andrew Sum Center for Labor Market Studies Boston, Massachusetts Prepared for:

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Andrew Sum Center for Labor Market Studies Boston, Massachusetts Prepared for: C.S. Mott Foundation Michigan

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  1. Assessing the Labor Market, Earnings, Income, Social, Civic, Health and Fiscal Consequences of Dropping Out-of-School to the Dropouts Themselves and to Society at Large in the State of Michigan Andrew Sum Center for Labor Market Studies Boston, Massachusetts Prepared for: C.S. Mott Foundation Michigan

  2. Key findings of Michigan’s Recent High School Graduation Tracking System. The longitudinal, individual student-based measures of four year on-time graduation rates for public school students at the state and high school district level; this methodology used by 16 states in reporting four year graduation rates for the Class of 2007 was recommended by the U.S. Congress in its passage of the No Child Left Behind legislation • Strengths: A student based ID system for tracking high school students across the state through graduation; the enrollment status of students not graduating on-time can be tracked; the system can yield five year and six year graduation rates; on-time graduation rates can be estimated for gender, race-ethnic, income, special education, and limited English proficiency subgroups of students.

  3. National Governor’s Association Graduation Rate Compact Formula # of students in a given cohort who graduate in 4 years or less [# of 1st time entering 9th graders in 2003-2004 - transfers out + transfers in] The statewide graduation rate for Michigan Class of 2007 was 75.4%

  4. Four Year On-Time Graduation Rates for Michigan High School Students, Freshman, Class of 2003-2004

  5. Four Year On-Time Graduation Rates for Michigan High School Students, in Selected School Districts, Class of 2003-2004

  6. Ranking of Four-Year Cohort Graduation Rates in Eight States That Have Released Graduation Rates Based on the National Governors Association's Compact Rate, 2006-2007

  7. Why We Should Care About High School Dropout Problems in Michigan and the U.S. • There are serious negative labor market and income problems for dropouts themselves over their entire working lives; substantially reduced employment and earnings opportunities, especially for men these gaps have been widening over time • The dropout population reduces the future size and quality of the state’s resident labor force, thereby limiting our economic growth potential • Dropping out has adverse effects on two parent family formation and on the cognitive, economic, social, and physical well-being of the children in their families

  8. Negative impacts on family poverty and income inequality • Negative impacts in physical and mental health, disability rates • Reduced civic engagement and participation in civic affairs • Increased incarceration rates among young dropouts • Adverse fiscal consequences of dropouts upon local, state, and federal budgets

  9. The Types of Measures Included in Our Study of the Economic and Social Consequences of Failing to Graduate from High School • Labor market outcomes (employment and earnings on a monthly, annual, lifetime basis) • Income outcomes (poverty, near poverty, low income status) • Health outcomes (health status, health insurance coverage, disability status) • Family outcomes (marriage rates, out-of-wedlock childbearing, well-being of children) • Civic outcomes (voting behavior, volunteerism) • Criminal justice outcomes (Incarceration rates + costs) • Fiscal outcomes in terms of taxes paid and cash and in-kind benefits received

  10. Negative Labor Market Outcomes Associated with Being a High School Dropout • Labor market outcomes • Lower rates of labor force attachment • Lower employment rates • Lower weekly wages • Lower annual earnings • Lower lifetime earnings • Reduced employee benefits; health insurance and pension coverage

  11. Key Findings on Employment Rates Across Educational Groups • Employment rates of high school dropouts 16-19 years old in Michigan are substantially below their 16-19 year old peers who graduate from high school. • The employment rate gaps between these two educational groups persist over their working lives; 16-64 year old dropouts in Michigan had an employment rate that was 20 percentage points below high school graduates 16-64 years old and 36 percentage points below bachelor degree holders. • Employment rates of high school dropouts peak in their early 30s; they begin to withdraw from the labor market much sooner than their better educated peers.

  12. Employment to Population Ratios of Out of School 16 to 19 Year Olds by Educational Attainment in the U.S., and the State of Michigan, 2005-2006 Average (in %)

  13. Employment/Population Ratios of 16-64 Year Old Michigan Adults by Educational Attainment in 2006 (in %)

  14. Percentage Point Gaps Between the E/P Ratios of Michigan and U.S. Males by Educational Attainment, 2006

  15. Percent of 18-64 Year Old Michigan Adults with No Paid Work Experience by Educational Attainment During 2006

  16. Mean Annual Earnings of Adults (16-64) in Michigan During 2005-2006

  17. Trends in the Real Mean Lifetime Earnings of Michigan Adults by Gender and Educational Attainment, Selected Years 1979 to 2006 (in Constant 2006 Dollars)

  18. Mean Lifetime Earnings of Michigan Adults from Ages 18-64 by Educational Attainment, Both Genders Combined, 2005-2006 Cross Sectional Snapshot

  19. Percentage Point Changes in the Mean Lifetime Earnings of Michigan Adults Ages 18-64 by Educational Attainment, Both Genders Combined, 1979 to 2006

  20. Percent Changes in the Mean Lifetime Earnings of Michigan Males 18-64 Years Old by Educational Attainment, 1979 to 2006

  21. Poverty Rates of Michigan Adults 18-64 Years Old By Educational Attainment, 2006 (in %)

  22. Trends in the Poverty/Near Poverty Rates of Michigan Adults 18-64 Years Old By Educational Attainment, 1979-2006

  23. Mean Expected Lifetime Years in Poverty/Near Poverty Among Michigan Adults from Ages 18-64 by Educational Attainment, Both Genders Combined, 2006

  24. Trends in Marriage Rates Among 20-64 Year Old Native-Born Males in Michigan and the U.S. by Educational Attainment, 1980-2005/06 (In %)

  25. Percent of New Births to Michigan and U.S. Women (15-50 Years Old) That Were Out-of-Wedlock by Educational Attainment of Mother, 2006 (ACS)

  26. Percent of Michigan and U.S. Families with Children that Were Headed by A Single Parent by Educational Attainment of Family Head, 2006

  27. Percent of 18-64 Year Old Adults in Michigan and the U.S. Reporting Their Health Status as Only Fair or Poor, March 2005-March 2006 Average

  28. Percent of 16-60 Year Old Disabled Adults in Michigan and the U.S. Who Self-Reported a Disability by Educational Attainment, 2006

  29. Percent of Voting Eligible Adults (18 and Older) Who Voted in the November 2004 Election by Level of Educational Attainment, Michigan versus U.S.

  30. Institutionalization Rates of 18-34 Year Olds in Michigan by Gender and Educational Attainment, 2006 (in %)

  31. A Listing of the Income, Payroll, Sales, and Property Tax Payments to the Federal Government and State and Local Governments

  32. Mean Annual Tax Payments of 16-64 Year Old Adults in Michigan and the U.S. by Educational Attainment, 2004-2005 Averages (in $)

  33. A Listing of the Cash and Non-Cash Transfers Received by Individuals or Households

  34. Percent of 16-64 Year Old Michigan Adults Receiving EITC Payments, Food Stamp Benefits, or Medicaid Benefits by Educational Attainment, 2005

  35. The Mean Net Annual Fiscal Contributions of 16-64 Year Olds in Michigan and the U.S. by Educational Attainment, Annual Averages, 2004-2005 (in $)

  36. Percent of 18-39 Year Olds in Michigan and the U.S. Who Were Poor or Near Poor by Educational Attainment, 2006-2007 Averages

  37. Percent of 18-39 Year Olds in Michigan Who Were Poor/Near Poor by Educational Attainment, 2006-2007

  38. The Mean Annual Earnings of Native Born 18-39 Year Olds in Michigan During the 2006-2007 Period by Educational Attainment, All and by Gender (includes zero earners)

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