The Value of High School Graduation in the United States: Per-Person Shadow Price Estimates for Use in Cost–Benefit Analysis
1
Centre for North American Business Studies (CNABS), Segal Graduate School of Business, Simon Fraser University, 500 Granville Street, Vancouver, BC V6C 1W6, Canada
2
La Follette School of Public Affairs, University of Wisconsin-Madison, Madison, WI 53706, USA
*
Author to whom correspondence should be addressed.
Adm. Sci. 2019, 9(4), 81; https://doi.org/10.3390/admsci9040081
Received: 23 May 2019 / Revised: 28 September 2019 / Accepted: 15 October 2019 / Published: 17 October 2019
(This article belongs to the Special Issue Cost-Benefit Analysis: Emerging and Understudied Topics and Applications)
One way for jurisdictions with limited analytic resources to increase their capability for doing cost–benefit analysis (CBA) is to use existing shadow prices, or “plug-ins”, for important social impacts. This article contributes to the further development of one important shadow price: the value of an additional high school graduation in the United States. Specifically, how valuable to a student, government, and the rest of society in aggregate is a high school graduation? The analysis builds on the method developed by the Washington State Institute for Public Policy and presents numerical updates and extensions to their analysis. For the U.S., the estimated net present value (the social value) using a 3 percent real discount rate of this shadow price is approximately $300,000 per each additional graduate. In appropriate circumstances, this value can be “plugged-in” to CBAs of policies that either directly or indirectly seeks to increase the number of students who graduate from high school.
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Keywords:
cost–benefit analysis; high-school graduation; shadow price; social value of education; plug-in value
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited
MDPI and ACS Style
Vining, A.R.; Weimer, D.L. The Value of High School Graduation in the United States: Per-Person Shadow Price Estimates for Use in Cost–Benefit Analysis. Adm. Sci. 2019, 9, 81. https://doi.org/10.3390/admsci9040081
AMA Style
Vining AR, Weimer DL. The Value of High School Graduation in the United States: Per-Person Shadow Price Estimates for Use in Cost–Benefit Analysis. Administrative Sciences. 2019; 9(4):81. https://doi.org/10.3390/admsci9040081
Chicago/Turabian StyleVining, Aidan R.; Weimer, David L. 2019. "The Value of High School Graduation in the United States: Per-Person Shadow Price Estimates for Use in Cost–Benefit Analysis" Adm. Sci. 9, no. 4: 81. https://doi.org/10.3390/admsci9040081
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