How Taxpayers Benefit When Students Attain Higher Levels of Education

M eeting the educational demands of the future will be expensive; however, in most states, public schools from kindergarten through the university level already experience budgetary challenges. Policymakers in many states face the challenge of motivating taxpayers to provide the funds required to meet mounting educational needs. Taxpayers who do not have children in public school may question why they should contribute to the support of public education or why those who stand to benefi t the most—the students—should not pay more for their education. To address these issues, RAND researchers examined the value that taxpayers receive as a result of increases in students’ levels of education. Using statistical modeling methods and data from a nationally representative sample of individuals included in the 2002 Survey of Income and Program Participation, they analyzed how increases in an individual’s educational attainment are associated with tax revenues, expenditures and revenues for social support and insurance programs, and spending for prisons and jails. Th e researchers examined four levels of educational attainment: some high school, high school graduation, some college, and college graduation. Th ey found that an increase in a student’s educational attainment—for example, completing high school rather than dropping out—is associated with substantial value for taxpayers over time. Th e results of this study could serve as a starting point for a subsequent cost-benefi t analysis of specifi c programs or policies that would induce students to complete more school. While the results describe how the public budget benefi ts when a single student attains a higher level of education, a more complex analysis would be required to draw broader conclusions about the benefi ts to taxpayers from specifi c investResearch Brief