B e PRIC E While the high cost of education draws headlines, the cost of not edu- lfi e cating America’s children goes largely ignored. The Price We Pay e l h remedies this oversight by highlighting the private, fiscal, and public costs d / of inadequate education. Leading scholars from a broad range of fields— L t e including economics, education, demography, and public health—attach v i WE PAY hard numbers to the relationship between educational attainment and n income, health, crime, and dependence on public assistance. They also explore policy interventions that could boost the education system’s performance and explain why demographic trends make the challenge of educating our youth so urgent today. Improving educational outcomes for at-risk youth is more than a noble goal. the It is an investment with the potential to yield benefits that far outstrip its P costs. The Price We Payanalyzes both sides of the balance sheet and suggests which policies are most likely to pay off. Economic and Social Consequences R of Inadequate Education I Contributors:Sigal Alon (Tel Aviv University), Thomas Bailey (Teachers C College, Columbia University), Ronald F. Ferguson (Kennedy School of Government, Harvard University), Irwin Garfinkel (School of Social Work, E Columbia University), Brendan Kelly (School of Social Work, Columbia University), Enrico Moretti (University of California–Berkeley), Peter Muennig (Mailman School of Public Health, Columbia University), Michael A. W Rebell (Teachers College, Columbia University), Richard Rothstein (Teachers College, Columbia University),Cecilia Elena Rouse (Princeton University), E Marta Tienda (Princeton University),Jane Waldfogel (School of Social Work, Columbia University), and Tamara Wilder (Teachers College, Columbia University). P A Clive R. Belfield is assistant professor of economics at Queens College of the Y City University of New York. He and Henry M. Levin are coauthors of Priva - tizing Educational Choice: Consequences for Parents, Schools, and Policy (Paradigm, 2005). Henry M. Levin is William H. Kilpatrick Professor of Eco- nomics and Education and director of the National Center for the Study of Privatization in Education at Teachers College, Columbia University. Among his many books is Privatizing Education: Can the Marketplace Deliver Choice, Efficiency, Equality, and Social Cohesion? (Westview, 2001). Clive R. Belfield Brookings Institution Press B Henry M. Levin Washington, D.C. r o www.brookings.edu o k EDITORS i n Cover design by Terry Patton Rhoads g s 00-0863-6-FM 10/9/07 4:48 PM Page i the Price We Pay 00-0863-6-FM 10/9/07 4:48 PM Page ii 00-0863-6-FM 10/9/07 4:48 PM Page iii the Price We Pay Economic and Social Consequences of Inadequate Education Clive R. Belfield Henry M. Levin editors brookings institution press Washington, D.C. 00-0863-6-FM 10/9/07 4:48 PM Page iv ABOUT BROOKINGS The Brookings Institution is a private nonprofit organization devoted to research, education, and publication on important issues of domestic and foreign policy. Its principal purpose is to bring the highest quality independent research and analysis to bear on current and emerging policy prob- lems. Interpretations or conclusions in Brookings publications should be understood to be solely those of the authors. Copyright © 2007 THE BROOKINGS INSTITUTION 1775 Massachusetts Avenue, N.W., Washington, D.C. 20036 www.brookings.edu All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means without permission in writing from the Brookings Institution Press. Library of Congress Cataloging-in-Publication data The price we pay : economic and social consequences of inadequate education / Clive R. Belfield and Henry M. Levin, editors. p. cm. Summary: “Highlights costs of inadequate education, attaching hard numbers to the relation- ship between educational attainment and critical indicators as income, health, crime, depen- dence on public assistance, and political participation. Explores policy interventions to boost the education system’s performance and explains why demographic trends are so challenging to edu- cating the nation’s youth”—Provided by publisher. Includes bibliographical references and index. ISBN-13: 978-0-8157-0864-3 (cloth : alk. paper) ISBN-10: 0-8157-0864-5 (cloth : alk. paper) ISBN-13: 978-0-8157-0863-6 (pbk. : alk. paper) ISBN-10: 0-8157-0863-7 (pbk. : alk. paper) 1. Education—Economic aspects—United States. 2. Education—Social aspects—United States. 3. Education—Costs—United States. 4. Educational equalization—United States. I. Belfield, C. R. II. Levin, Henry M. III. Title. LC66.P735 2007 338.4'737—dc22 2007034882 9 8 7 6 5 4 3 2 1 The paper used in this publication meets minimum requirements of the American National Standard for Information Sciences—Permanence of Paper for Printed Library Materials: ANSI Z39.48-1992. Typeset in Adobe Garamond Composition by R. Lynn Rivenbark Macon, Georgia Printed by R. R. Donnelley Harrisonburg, Virginia 00-0863-6-FM 10/9/07 4:48 PM Page v Contents Acknowledgments vii 1 The Education Attainment Gap: Who’s Affected, How Much, and Why It Matters 1 Clive R. Belfield and Henry M. Levin part one Assessing the Scope of the Challenge 2 Beyond Educational Attainment: A Multifaceted Approach to Examining Economic Inequalities 21 Richard Rothstein and Tamara Wilder 3 Diversity and the Demographic Dividend: Achieving Educational Equity in an Aging White Society 48 Marta Tienda and Sigal Alon 4 Implications of Educational Inequality in a Global Economy 74 Thomas Bailey v 00-0863-6-FM 10/9/07 4:48 PM Page vi contents vi part two Quantifying the Costs of Inadequate Education 5 Consequences for the Labor Market 99 Cecilia Elena Rouse 6 Consequences in Health Status and Costs 125 Peter Muennig 7 Crime and the Costs of Criminal Justice 142 Enrico Moretti 8 Welfare and the Costs of Public Assistance 160 Jane Waldfogel, Irwin Garfinkel, and Brendan Kelly part three Directions for Reform 9 Educational Interventions to Raise High School Graduation Rates 177 Henry M. Levin and Clive R. Belfield 10 The Promise of Early Childhood Education Interventions 200 Clive R. Belfield 11 Toward Excellence with Equity: The Role of Parenting and Transformative School Reform 225 Ronald F. Ferguson 12 The Need for Comprehensive Educational Equity 255 Michael A. Rebell Contributors 265 Index 267 00-0863-6-FM 10/9/07 4:48 PM Page vii Acknowledgments T he overall theme of this book and much of its contents were devel- oped for the First Annual Teachers College Symposium on Educational Equity, held by the Campaign for Educational Equity of Teachers College, Columbia University, on October 24–26, 2005. The symposium was dedi- cated to “The Social Costs of Inadequate Education,” with empirical papers that attempted to identify the consequences for society of having a substantial portion of the population receive an education that is inadequate to the social, political, economic, and personal demands of adult life. We thank the authors of the symposium papers and the chapters in this volume, who are national experts on the topics that were covered. A second and related source of input was the project titled “The Costs and Benefits of an Excellent Education for All of America’s Children.” This re- search project was devoted to documenting and comparing the costs to the public of increasing high school graduation with the public benefits that would accrue to that investment in the form of higher tax revenues and lower costs for crime, public assistance, and health care. We thank the Laurie M. Tisch Foundation and the Campaign for Educa- tional Equity for sponsoring the symposium and the Gerard and Lilo Leeds Foundation for funding the project on the costs and benefits of an excellent education. In addition, we thank Arthur Levine, Michael Rebell, and the Trustees of Teachers College for their roles in establishing the symposium and vii 00-0863-6-FM 10/9/07 4:48 PM Page viii acknowledgments viii Susan Fuhrman for her continuing support of the Teachers College focus on improving educational equity. The following people deserve our gratitude for making the symposium a success: Joe Brosnan, Laurie Dorf, Inez Gonzales, Joe Levine, Mark Noizumi, Judy Pryor, Karen Schnur, and Elisabeth Thurston. We are also grateful to Gerard and Lilo Leeds, Gerry House, Greg Jobin-Leeds, Dan Leeds, Rosa Smith, Bob Wise, and Doug Wood for reviewing the cost- benefit study and offering suggestions for improvement and to Jens Ludwig and Russ Rumberger for providing a valuable technical assessment of that study. We express our appreciation to Gwyneth Connell, Heather Schwartz, and Molly Sherlock for assistance in editing the manuscript and to Mary Kwak of the Brookings Institution Press for managing the logistics of publication. Finally, we acknowledge the important contributions of our research collabo- rators, Peter Muennig, of the Mailman School of Public Health at Columbia University, and Cecilia Rouse, of the Woodrow Wilson School at Princeton University. 00-0863-6-FM 10/9/07 4:48 PM Page ix the Price We Pay