Chronic absenteeism and low graduation rates cost California billions annually

PHILADELPHIA, PA (May 14, 2025) – The University of Pennsylvania's Graduate School of Education's Center for Benefit-Cost Studies (CBCSE) in partnership with UCLA’s Center for the Transformation of Schools, has released a comprehensive report titled "The Ten Billion Dollar Deficit: The Economic Burdens of Inequities Across California Schools." This report highlights the significant economic and social burdens imposed by low high school graduation rates, chronic absenteeism, and disciplinary sanctions in California's K-12 education system. 

The report was completed in partnership with UCLA’s Center for the Transformation of Schools, as part of California’s MTSS Research Consortium and authored by Clive Belfield, Viviana Rodriguez, A. Brooks Bowden, and Julia Oas.

"These findings not only highlight the significant economic burdens faced by California but also give us an indication of what the costs could be nationwide. Addressing these challenges can lead to substantial savings and improved educational outcomes across the country," said A. Brooks Bowden, Associate Professor of Educational Policy at the University of Pennsylvania  and Director of the Center for Cost-Benefit Studies of Education.

Key Findings:

The report, which uses an economic model to calculate the burdens on the state’s school system, its parents, and its economy, reveals that each year, approximately 75,000 students across California fail to complete high school. This failure imposes substantial burdens from both social and fiscal perspectives. These students earn less, contribute less in taxes, and draw on government services more frequently than high school graduates, resulting in long-term economic disadvantages.

Chronic absenteeism is another critical issue, with at least one in ten students, and potentially up to three in ten, being chronically absent each year. This absenteeism not only hampers student learning but also adversely affects school efficiency, leading to significant economic burdens.
Disciplinary sanctions, particularly suspensions and expulsions, also contribute to large economic burdens. These sanctions not only impact the disciplined students but also have adverse effects on their peers' educational opportunities.

Economic Impact:

The report uses new evidence and standard shadow-pricing techniques to calculate these economic burdens. The summary results show that for each additional high school graduate, there is a social gain of almost half a million dollars and a taxpayer gain of nearly $150,000. A 3-percentage point increase in the statewide high school graduation rate could result in almost $10 billion in social savings and $3 billion in taxpayer savings.
For students who are chronically absent, the economic burden is $5,630 per student. Disciplinary social burdens are also high, with each expulsion costing $70,870 in social burdens.

Inequities in Education:

The report identifies significant inequities within and across California public schools. African American, Hispanic, and economically disadvantaged students face higher burdens related to attendance and discipline. These inequities affect families, schools, and the local tax base, highlighting the need for targeted interventions.

Policy Implications:

The findings have important implications for both federal and state governments. Increased high school graduation rates would boost federal and state/local tax revenues, providing a strong incentive for investment in educational resources. The report suggests that federal support for educational investments, such as tax exemptions for educational expenditures, could be beneficial. State governments, with greater control over education funding and regulation, can invest in targeted student support to address these challenges.

Recommendations:

The report recommends significant investments to reduce chronic absenteeism and improve conditions for students facing disciplinary actions. California’s Multi-Tiered Systems of Support (MTSS) are highlighted as an important framework for increasing school efficiency and addressing these challenges.

The Center for Benefit-Cost Studies of Education at the University of Pennsylvania Graduate School of Education conducts rigorous research to inform education policy and practice. The Center focuses on analyzing the costs and benefits of education programs and interventions to guide effective decision-making to improve human capital.
 

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