The cost of Milwaukee's drop-outs, and what to do about it

A new report by the Alliance for Excellent Education estimates the economic costs to cities of having high drop-out rates. In the four-county Milwaukee metro area, it is estimated that cutting the drop-out rate in half, or having an additional 3,200 high school graduates annually, would result in an additional $7 million in annual state and local property, income, and sales tax revenue, due to the higher salaries and increased spending associated with being a high school graduate. The graduates themselves "would together earn nearly $41 million in additional wages over the course of an average year compared to their likely earnings without a diploma." The report also notes that in the Milwaukee area, of the 98 high schools analyzed, 23 were found to be "drop-out factories" in which fewer than 60% of freshman progress to their senior year on time.


How to remake these "drop-out factories" back into schools is the focus of another new report, this one by the National Governors Association (NGA) Center for Best Practices. The report recommends four actions that state governors can take to tackle high drop-out rates:

1. Promote high school graduation. The NGA suggests that governors increase the age of compulsory school attendance, weight graduation rates heavily in school accountability schemes, and appoint a drop-out czar or other high-level official to be accountable for statewide improvements.


2. Target youth at risk of dropping out. State data systems can be designed to help identify at risk students as early as possible, making them eligible for intervention and support programs prior to high school.


3. Re-engage youth who have dropped out. Re-entry programs for juvenile offenders can be an important tool for getting drop-outs back into school. States can also create financial incentives or rewards for schools that successfully matriculate and graduate former drop-outs.


4. Provide rigorous, relevant options for earning a high school diploma. This includes offering an array of high school programs focused on job readiness for those students planning to enter the workforce after high school.

As an NGA report, the recommendations are aimed at state policymakers. But some of these policies could be adopted at the local level. Connections between school and work are an example of an area in which an effective local policy might even be better than a state-wide effort.


Drop-outs are a costly problem for the regional economy and southeast Wisconsin cannot afford to wait for whomever next holds the governor's office to tackle this problem. With support of local political and business leaders, best practices could be implemented at the district level sooner, rather than later.

Graduation rates: the silent epidemic

This month a campaign to increase high school graduation rates was launched by the Bill & Melinda Gates Foundation, Civic Enterprises, the National Governors Association (NGA), Time, MTV, and Education Week. A summit was held in Washington D.C. May 9 that resulted in a ten-point plan, which includes a call for comparable data from all 50 states, among other things. Several organizations released new research, publications, or initiatives in conjunction with the summit, including MTV's The Dropout Chronicles, a documentary-style series following three at-risk high school students, and Education Week's cool internet graduation rate mapping tool. The Ed Week-generated map for Milwaukee is shown at left.

As a researcher who uses graduation rate data each year, the most interesting development from the summit is this push for better and more accessible data. Currently very few states, including Wisconsin, use a longitudinal method to calculate graduation rates--to attempt to follow individual students over the course of their high school years. It seems obvious that the only true graduation rate would be one that takes into account students who move, transfer to another school, or graduate early as well as those who drop out. But gathering and maintaining the neccessary individual student data is very costly and so most states choose to estimate. The result is that we don't have a handle on the true extent of the problem; thus, the "silent epidemic" moniker.

Because of this uncertainty, many researchers have come up with various ways to calculate estimates of graduation rates. One of the most prominent has been Jay Greene of the Manhattan Institute, whose methods I critiqued in a 2004 Milwaukee Journal Sentinel op ed piece. (Dr. Greene responded emphatically the next week.) The National Governors Association (NGA) decided to enter the fray with a better solution:

Recent debates among national researchers have focused on which data sources and calculations provide the best estimates of high school graduation rates...[NGA] move[s] beyond that debate by counting actual graduates.

In 2005 the governors of all 50 states signed the NGA's Graduation Counts Compact, promising to improve their graduation data and agreeing to use a uniform formula for calculating the graduation rate. So far only two states, Colorado and Maryland, have codefied the compact's common formula, but 39 states plan to report a graduation rate calculated with the common formula by 2010. Wisconsin plans to be in full compliance with the compact by 2009, and has made the necessary changes to the rate formula and data collection in order to be so.

The Forum tracks graduation rates for school districts in southeast Wisconsin in our annual Public Schooling report. The 2002-2003 rate, under the old formula (number of graduates divided by the sum of graduates plus dropouts for that class over the four years), was 76.7% in Racine, 89.8% in Kenosha, and 60.7% in Milwaukee, for example. In 2004-2005, under the new formula, the rate was 74.7% in Racine, 91.3% in Kenosha, and 59.9% in Milwaukee. The new formula is the number of regular graduates divided by an estimate of the total cohort group measured from the beginning of high school, expressed as a percentage. This total cohort group includes regular graduates, other high school completers (i.e. GED recipients), other students who reached the age 21 in the school year, and students who dropped out during the four years.

There is not much difference in the rates as a result of moving to the new formula, because the new formula has, unfortunately, still been an estimate of the graduation rate. The number of cohort dropouts has been estimated; all students leaving school are assumed to be dropouts, when in fact, they may be transferring to a different school or moving out of state. However, starting with 2006-2007 school year data, the state will be able to report an actual cohort rate for June 2007 graduates. Districts have been required to track and verify student movement over the past four years and will provide an actual cohort dropout count, which will greatly improve the accuracy of the graduation rate.

Thus, we will soon know whether the "silent epidemic" in Wisconsin is something to shout or whisper about.