The Benefits to Taxpayers from Increases in Students - RAND ...

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48 The Benefits to Taxpayers from Increases in Students’ Educational Attainment Six percent of the individuals in the SIPP data received food stamps. For recipients, the extra income provided by food stamps in 2002 averaged $1,450 per year, with a high of $9,250. Our results show that the largest public saving in food stamps would result from raising educational attainment from high school dropout to high school graduate, for all gender, race/ethnicity, and place-of-birth groups. These findings are illustrated in Figure 4.3. Using U.S.-born Hispanic women as an example, the figure shows food stamp benefits at different ages and levels of education. The top line on the chart shows that the highest food stamp benefit—a little over $600 per year when the woman is 20 years old—would be paid if the woman does not finish high school. Interestingly, the next highest benefit would be paid if the woman completes some college, followed by the case in which she graduates high school. Savings in food stamp benefits paid to women when they raise their level of education are about six to eight times higher than the savings that are realized when men raise their level of education. This gap is primarily driven by the fact that women are far more likely than men to use food stamps. The likelihood of participation for men is not higher than 16 percent for any age, race/ethnicity, and education combination. For women, the rates are as high as 50 percent, for 18-year old black women who do not have a high school diploma, and 32 percent, for their Hispanic counterparts. While annual expected income from food stamps differs by gender, with women receiving 50 percent to 100 percent more than men, we do not observe a similar differ- Figure 4.3 Expected Annual Food Stamp Benefits for a U.S.-Born Hispanic Woman 700 Expected annual benefits (2002 $) 600 500 400 300 200 100 Less than high school graduate High school graduate Some college Bachelor’s degree or more RAND MG686-4.3 0 20 25 30 35 40 45 50 55 60 65 70 75 Age
Spending on Social Support Programs 49 ence statistically across education levels for men. For women, the only practical difference is between college graduates and all other levels of education. A U.S.-born black woman who graduates from high school rather than dropping out would save the public budget $1,000 per year. On the other hand, U.S.-born white men who graduate from high school rather than dropping out would produce a maximum saving of only $50 per year. Savings for women are highest at age 18 and decrease uniformly with age. Savings for men peak in the mid-forties. Effects of Educational Attainment on Supplemental Security Income Spending The SSI program provides an additional safety net to typical Social Security beneficiaries who have limited resources. Eligibility criteria for this assistance program include disability, age over 64, having a blind family member, and the amount of money in bank accounts. The program is administered by the Social Security Administration, with federal and state financing. In our nationally representative data, 4 percent of individuals received SSI benefits for themselves or a dependent. For beneficiaries, SSI income averaged $4,000 per year, with a high of $17,000. The SIPP data do not indicate whether the SSI benefits paid to a beneficiary were paid for the beneficiary or for a dependent. However, a dependent’s eligibility for SSI benefits and amount of benefits paid on behalf of an eligible dependent depend on the dependent’s family income. Because more highly educated people earn more, on average, they are less likely to qualify for SSI benefits even if they have a blind dependent. The results show that, by far, the largest public saving in the SSI program occurs between high school dropouts and high school graduates, across all gender, race/ethnicity, and place-of-birth groups. Gains for women with increased education surpass those of men by 50 to 100 percent, with the exception of Asians, for whom the gain is higher for men. The differential between men and women is driven by the SSI utilization gap between the genders. For male high school dropouts, participation first grows with age, levels out at around age 50, spikes at 65 along with retirement, and falls rather fast as age rises after that point. For female high school dropouts, participation grows with age all the way until retirement age, when it jumps to a different level and then stays mostly flat until death. As for annual expected SSI income, the major difference in benefits paid to individuals before they are of retirement age is between college graduates and all other education groups, for both men and women. This implies that disability has less drastic effects on the labor market for college graduates than it does for people with less education. This makes sense in that college graduates are likely to have a choice of jobs that are not physically demanding, and a disability would be less likely to restrict job
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THE ARTS CHILD POLICY CIVIL JUSTICE
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The Benefits to Taxpayers from Incr
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Preface Meeting the educational dem
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Figures 3.1. Present Value of Lifet
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xx The Benefits to Taxpayers from I
Page 25: Abbreviations ADA CPS EITC FTE GED
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Page 39 and 40: Chapter Two Analytic Approach There
Page 41 and 42: Analytic Approach 15 effects of edu
Page 43 and 44: Analytic Approach 17 women employed
Page 45 and 46: Analytic Approach 19 State and Loca
Page 47 and 48: Analytic Approach 21 tion of educat
Page 49 and 50: Analytic Approach 23 The difference
Page 51 and 52: Analytic Approach 25 but a very sma
Page 53 and 54: Analytic Approach 27 1997 changes g
Page 55 and 56: Chapter Three Payments for Taxes an
Page 57 and 58: Payments for Taxes and Social Progr
Page 67 and 68: Chapter Four Spending on Social Sup
Page 69 and 70: Spending on Social Support Programs
Page 73: Spending on Social Support Programs
Page 99 and 100: Chapter Seven Educational Attainmen
Page 101 and 102: Educational Attainment and Public R
Page 113 and 114: Appendix A Data and Sources Data Th
Page 115 and 116: Data and Sources 89 Program Benefit
Page 117 and 118: Appendix B Estimating Tax Payments
Page 119 and 120: Estimating Tax Payments 93 Federal
Page 121 and 122: Appendix C Social Program Participa
Page 123 and 124: Social Program Participation and Co
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Social Program Participation and Co
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Appendix D Incarceration Cost Estim
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References Aos, Steve, Roxanne Lieb
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References 115 Krop, Richard, Steph
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References 117 U.S. Department of J
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