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

Spending on Social Support Programs 57
Figure 4.9
2002 Value of Lifetime Decrease in Social Program Spending Resulting from Increased
Education for U.S.-Born Men
100,000
Lifetime decrease in spending (2002 $)
75,000
50,000
25,000
Bachelor’s degree
Some college
High school graduate
0
White Asian Black Hispanic
NOTES: The figure shows the value of decreases in spending relative to that for a high school
dropout. Dollar amounts are expressed in 2002 dollars discounted to age 18 using a 3 percent
real discount rate.
RAND MG686-4.9
demand the lowest wages in the labor market, and therefore they constitute the bulk
of the low-income population. Individuals in the “low-income” or “very low-income”
groups satisfy the primary eligibility criteria for many social support and insurance
programs. High school dropouts are also less likely to hold jobs that offer health insurance,
so they are more inclined to rely on government-provided insurance. Further, a
disabled individual often cannot perform the manual jobs that are available to people
with little education, so disability among high school dropouts is more likely to result
in loss of earning power and participation in one or more social support programs.
Beyond the high school diploma, some college seems to have more impact for
women and a bachelor’s degree seems to have a higher effect for men.
Race/ethnicity also matters. For men and women, Asians and blacks respond
most strongly to increased education, with Hispanics following and whites coming in
last.