CoPS/IMPACT Working Paper Number G-321

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

Authors: Peter B. Dixon, Maureen T. Rimmer and Scott Farrow


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.

JEL classification: I26; J08; J24

Keywords: Covid and high-school drop-out rates; dynamic model of student numbers; educational attainment of workforce; cost of reduced high-school graduation rates

Working Paper Number G-321 can be downloaded in PDF format. To print this you will need the Adobe Acrobat Reader.

Go to working papers page