Modeling the economic effects of increased drop-out rates from high school

Peter Dixon, Maureen Rimmer and Robert Farrow

Centre of Policy Studies/IMPACT Centre Working Papers from Victoria University, Centre of Policy Studies/IMPACT Centre

Abstract: With Covid, high-school students are having difficulty staying in school. We present a dynamic model of the effects of increased drop-out rates. The model accounts for labor productivity, crime costs and high-school savings. We simulate a 25 per cent increase in drop-out rates occurring in the two years starting September 2019, with a gradual return to pre-Covid rates in 2025. Our results show a loss of 597,000 high-school graduations from cohorts entering high-school in 2016-2024. The present-value cost is between $42 and $137 billion, depending on discount rates. These results support investment in high-school retention policies through the Covid crisis.

Keywords: Covid and high-school drop-out rates; dynamic model of student numbers; educational attainment of workforce; cost of reduced high-school graduation rates (search for similar items in EconPapers)
JEL-codes: I26 J08 J24 (search for similar items in EconPapers)
Date: 2021-09
New Economics Papers: this item is included in nep-isf and nep-ure
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