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

56 The Benefits to Taxpayers from Increases in Students’ Educational Attainment
Figure 4.8
Expected Annual Social Security Benefits for a U.S.-Born Hispanic Woman
Expected annual benefits (2002 $)
12,000
10,000
8,000
6,000
4,000
2,000
Less than high school graduate
High school graduate
Some college
Bachelor’s degree or more
RAND MG686-4.8
0
20 25 30 35 40 45 50 55 60 65 70 75
Age
Extra spending reaches a high of $1,150 for U.S.-born white women and $2,500
for their male counterparts. Yet, this additional spending occurs four decades after
educational investments are made, and lasts for about two decades only. In contrast,
disability and survivor program savings start immediately after educational investments
are completed and occur over four decades.
On a present-value basis, the near-term savings in disability and survivor insurance
outweigh the long-term extra spending on retirement insurance. This finding
holds true for all demographic subgroups and for a wide range of assumptions about
the value of money over time. For instance, the net savings is around $3,500 and
$2,500 for U.S.-born Hispanic men and women, respectively.
Effects of Educational Attainment on Spending on Social Programs
Figures 4.9 and 4.10 summarize savings in spending on social programs by educational
attainment for U.S.-born men and women.
The figures illustrate our finding that the greatest savings in spending on social
programs is produced by individuals who graduate from high school rather than dropping
out. The savings are the greatest for black and Asian men, at about $40,000, in
2002 dollars, over their lifetimes. High school dropouts have the lowest skill set and