Equation | (# participants) x [(% participants who graduate) – (% counterfactual rate of high school graduation)] x {[($ difference in lifetime earnings for high school graduates vs. no high school completion) x (% causation factor of high school on earnings)] + [(% counterfactual rate of low-income high schoolers who enroll in college but do not graduate) x ($ difference in lifetime earnings of individuals with some college vs. high school with no further education) x (% causation factor of some college on earnings)] + [(% counterfactual rate of college progress – associate degree) x ($difference in lifetime earnings of individuals with an associate degree vs. high school with no further education) x (% causation factor of college on earnings)] + [(% counterfactual rate of college progress – bachelor’s degree) x ($difference in lifetime earnings of individuals with a bachelor’s degree vs. high school with no further education) x (% causation factor of college on earnings)]} |
Explanation | This metric estimates the additional earnings associated with receiving a high school diploma. It also estimates benefits from the subsequent increase in the chance of enrolling or earning a higher educational degree. Number of participants: Reported by program. High school Percentage of participants who graduate from high school: Reported by program. Counterfactual rate of high school graduation: [65%]. This is the graduation rate of low-income students in the Twin-Cities (Minnesota Compass, 2018). Whenever appropriate, we use the graduation rate of low-income students (approximated by eligibility for free- or reduced-price lunch) in specific school districts. Difference in lifetime earnings between high school graduates vs. individuals with no high school completion: [$198,700]. This is computed using ACS data (U.S. Census Bureau, 2016). These benefits are already discounted to present value. Causation factor of high school on earnings: [0.5]. This is the percentage of observed earnings gains are caused by high school graduation. This factor measures the degree to which the observed difference in earnings between high school graduates and non-high school graduates is causal (WSIPP, 2019). Some college Counterfactual rate of college enrollment without completion for individuals with a high school diploma: [25%]. We use national enrollment data for students from low-income schools to estimate college enrollment in Minnesota. In Minnesota, [51%] of high school graduates enroll in college (Minnesota Department of Education, 2018). Data from the National Student Clearing House (2016) indicates that low-income students enroll in college [15%] less than higher-income students. Thus, we estimate that [43%] of low-income students in Minnesota enroll in college. We subtract the percent of students who graduate (average of the 2- and 4-year degree program graduation rate) [48%] to obtain an estimate of the percentage of students who enroll in college but do not graduate [25%]. Difference in lifetime earnings between some college vs high school: [$99,500]. This is computed using ACS data (U.S. Census Bureau, 2016). These benefits are already discounted to present value. Causation factor of some college on earnings: [0.56]. This is the percentage of observed earnings gains are caused by the impact of some college experience (“some college”) on earnings. This factor measures the degree to which the observed difference in earnings between individuals with some college experience and those with only a high school diploma is causal (WSIPP, 2019). Associate degree Counterfactual rate of college graduation for individuals with a high school equivalent: [6%]. We estimate this rate as follows: As shown above, [43%] of low-income students in Minnesota enroll in college, [46%] of these students enroll in 2-year institutions, and [29%] of them graduate (National Student Clearing House, 2016). Difference in lifetime earnings for individuals with an associate degree vs. a high school diploma: [$112,300]. This is computed using ACS data (U.S. Census Bureau, 2016). These benefits are already discounted to present value. Causation factor of some college on earnings: [0.56]. This is the percentage of observed earnings gains are caused by an associate degree, which is approximated using the causation factor from “some college”. This factor measures the degree to which the observed difference in earnings between individuals with some college and those with only a high school diploma is causal (WSIPP, 2019). Bachelor’s degree Counterfactual rate of college graduation for individuals with a high school equivalent: [9%]. We estimate this rate as follows: As shown above, [43%] of low-income students in Minnesota enroll in college, [35%] of these students enroll in 4-year institutions, and [57%] of them graduate (National Student Clearing House, 2016). Difference in lifetime earnings for individuals with a bachelor’s degree vs. a high school diploma: [$465,800]. This is computed using ACS data (U.S. Census Bureau, 2016). Causation factor of college on earnings: [0.42]. This is the percentage of observed earnings gains are caused by a four-year college degree. This factor measures the degree to which the observed difference in earnings between graduates and those with only a high school diploma is causal (WSIPP, 2019). |
References | Minnesota Compass (2018). Education: High school graduation. High school students graduating on time by income. Retrieved from http://www.mncompass.org/education/high-school-graduation#7-6108-d Minnesota Department of Education. (2018). Minnesota report card. http://rc.education.state.mn.us/# Minnesota Office of Higher Education. (2017). Graduation rates: Graduation and retention rates of undergraduates in Minnesota’s postsecondary institutions. Retrieved from https://www.ohe.state.mn.us/mPg.cfm?pageID=754 National Student Clearinghouse (2016). National College Progression Rates. Retrieved from: https://nscresearchcenter.org/hsbenchmarks2016/ U.S. Census Bureau. (2016). American Community Survey 5-year estimates – public use microdata sample, 2012-2016. Generated using Public Use Microdata Area (PUMA) in the Seven-county Twin Cities Metropolitan Area. Washington State Institute for Public Policy. (2019). Benefit-Cost Technical Documentation. Retrieved from: http://www.wsipp.wa.gov/TechnicalDocumentation/WsippBenefitCostTechnicalDocumentation.pdf |