Society and Culture, Education

Increased graduation rate in Louisiana means big bucks

Image Credit: Shutterstock

Image Credit: Shutterstock

In a recent report that did not get the attention it deserved, the Louisiana Department of Education released graduation rate figures for school systems across the Pelican state.

From 2005-2006 to 2011-2012, 48 parishes (counting the New Orleans Recovery District as its own parish) saw gains in graduation rates while only 17 saw declines.

Graduating from high school in today’s America is really, really important. Decades of research by economists has found that individuals who graduate from high school make more money (and thus pay more in taxes); live longer, healthier lives; and are less likely to commit crimes — all to the tune of over $430,000 in benefits for individuals and society writ large.

In total, Louisiana posted a state-wide 7.5 percentage point increase in its graduation rate. Simply multiplying that number by the total number of students in the state (which the National Center for Education Statistics puts at 696,558) shows today’s Louisiana projected to see approximately 52,000 more graduates than the Louisiana of just a few years ago. Multiplying that by the above estimate of the value of a high school diploma puts the overall economic impact of that improvement at over $22 billion.

Just for fun, I decided to take all of the districts that saw at least a 10 percentage point gain and measure the value of their improvement.

The results are simply staggering.

McShane Parish

Now, before anyone goes too crazy interpreting these data, this is admittedly a back of the envelope calculation. The cohorts aren’t exactly identical, and there is definitely population change over time. Similarly, it is hard to guess as to the equilibrium effects of increased graduation rates and it is absolutely possible that as more people graduate, the individual value of that diploma will decrease. But I still think it illustrates (albeit imperfectly) a couple of things:

1. It’s hard to understate the importance of high school graduation. Any organization that increases the rate of high school graduation will have an outsized impact on the economic condition of any locality.

2. Something is happening in Louisiana. What? I don’t know, and I’m sure that there will be as many causal inferences as there are observers of these data.  Several of the wealthiest districts in the state made the list of biggest gainers (Ascension, Assumption, Terrebonne, Jefferson, and St. John the Baptist, all with median household incomes over $42,500) as did the three of the poorest districts in the state (St. Helena, Tensas, and Madison, all with median household income below $27,500). The much-touted New Orleans Recovery School District, which is now over 70% charter schools, comes in at #3 on the list, representing a benefit of almost $3 billion.

However you interpret these data, it appears to be good news and the hardworking folks down there deserve a pat on the back.

One thought on “Increased graduation rate in Louisiana means big bucks

  1. I wouldn’t consider this conclusion to be accurate… unless the enrollment in these districts remained the same. I assume that numbers are down. Thoughts?

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