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

58 The Benefits to Taxpayers from Increases in Students’ Educational Attainment
Figure 4.10
2002 Value of Lifetime Decrease in Social Program Spending Resulting from Increased
Education for U.S.-Born Women
150,000
Lifetime decrease in spending (2002 $)
125,000
100,000
75,000
50,000
25,000
Bachelor’s degree
Some college
High school graduate
RAND MG686-4.10
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.
Sensitivity Analysis
To explore the extent to which our results are sensitive to our estimates of the effects
of education on social program spending, we replicated all the calculations assuming
that the effects of increases in education were 25 percent smaller than our estimates.
We then calculated the percentage reduction in the estimated effect of an increase
in education for each of the demographic populations if the effect of the increase in
education on social program spending were only 75 percent of our estimate. Table 4.2
shows the range of percentage reductions in total benefits across the U.S.-born demographic
groups for each increase in education level. It also shows the specific demographic
group for which the sensitivity to the 25 percent reduction in the estimates of
the effects of education was smallest and largest.
Reducing the estimate of the effect of an increase in education from less than high
school graduate to high school graduate on social program spending results in roughly
the same percentage decrease in estimated total benefits for all demographic groups.
The same is true for an increase in education from less than high school graduate to
bachelor’s degree or more. Increases in education from high school graduate to some
college and from some college to bachelor’s degree or more have different effects on dif-