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Slide 1: Education and Rhode  Island’s Economic Future Bryan C. Hassel, Ph.D. and Jacob Rosch December 1, 2009
Slide 2: $400 ‐ $670 Billion, with a “b” Payoff in national GDP of closing the  income achievement gap 3 – 5% of the nation’s economic output ‐ McKinsey & Company Source: McKinsey & Company, “Economic Impact of the Achievement Gap in America’s Schools,” 2009 12/1/2009 2
Slide 3: $425 ‐ $700 Billion Payoff in national GDP for improving  education in low‐performing states 3 – 5% of the nation’s economic output ‐ McKinsey & Company Source: McKinsey & Company, “Economic Impact of the Achievement Gap in America’s Schools,” 2009 12/1/2009 3
Slide 4: Overview Why are these numbers so large? How would better education  payoff for Rhode Island? How can RI get there from here?  12/1/2009 4
Slide 5: Overview Why are these numbers so large? How would better education payoff  for Rhode Island? How can RI get there from here?  12/1/2009 5
Slide 6: More Education Pays Median Earnings and Tax Payments of Full‐Time  Year‐Round Workers, by Education Level, 2005 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $0 Not a High  High School  Some  School  Graduate College Graduate Associates  Bachelor's  Degree Degree Masters  Degree Doctoral  Professional  Degree Degree $23,400 $31,500 $37,100 $40,600 $50,900 $79,400 $61,300 $100,000 After‐Tax Income Taxes Paid Source: College Board, “Education Pays” (2007) 12/1/2009 6
Slide 7: More Education Pays 40% 30% 20% 10% 0% Medicaid Not a High School Graduate Some College BA or Higher 12/1/2009 Individuals 25 and Older In Households in Public  Assistance Programs, by Education Level, 2005 Percentage Participating School Lunch Food Stamps High School Graduate Associates Degree Source: College Board, “Education Pays” (2007) 7
Slide 8: More Education Pays Incarceration, by Educational Attainment, 1997 2.5% Percentage Reporting 2.0% 1.5% 1.0% 0.5% 0.0% 1.9% 1.2% 0.3% 0.1% Not a High School  Graduate High School  Graduate Some College BA or Higher Source: College Board, “Education Pays” (2007) 12/1/2009 8
Slide 9: Quality Matters It’s not simply more education that matters – Test scores predict attainment – Test scores predict earnings 12/1/2009 9
Slide 10: Early scores predict future scores How Low-Performing 4th Graders Fare in 8th Grade 80% 62% 60% 40% 20% 0% Bottom  Quartile 26th‐50th 50th‐75th Top Quartile 30% 11% 2% Eighth‐grade achievement  Source: McKinsey & Company, “Economic Impact of the Achievement Gap in America’s Schools,” 2009 12/1/2009 10
Slide 11: Math scores in high school predict  future, especially for poor kids. Highest Level of Education Attained,  by High School Math Scores 30% 29% 11% 3% 10x Greater Low Math Scores No High School Degree High Math Scores BA or Higher Source: College Board, “Education Pays” (2007) 12/1/2009 11
Slide 12: 8th grade performance predicts  education attainment Percent of Students Graduating College by 8th Grade Achievement Quartile 36% 20% 10% 56% 5x Greater Bottom        Quartile 25‐50th        Percentile 51‐75th        Percentile Top           Quartile Source: McKinsey & Company, “Economic Impact of the Achievement Gap in America’s Schools,” 2009 12/1/2009 12
Slide 13: Quality Matters The median income of students with the  highest 8th grade achievement is 40% greater  than students with the lowest achievement. $28,000  $24,000  $20,000  $25,000  40% Greater Bottom        Quartile 26‐50th         Percentile 51‐75th        Percentile Top           Quartile Source: McKinsey & Company, “Economic Impact of the Achievement Gap in America’s Schools,” 2009 12/1/2009 13
Slide 14: Payoffs for States: Tax Revenues More education leads to greater lifetime tax  revenues. Present Value of Lifetime Increases in Tax  Revenue from Increased Education, White Male $211,000  $91,000  $54,000  High School Graduate Some College BA or Higher Source: RAND, “The Benefits to Taxpayers from Increases in Student’s Educational Attainment” 2009 12/1/2009 14
Slide 15: Payoffs for States: Tax Revenues A greater concentration of college graduates  improves overall average income $27,000 $20,400 23% College Grads 28% College Grads 33% College Grads 38% College Grads Not a high school graduate Source: College Board, “Education Pays” (2007) 12/1/2009 15
Slide 16: Payoffs for States: Other Benefits High quality education, and greater  attainment have been shown to improve: – Attractiveness to businesses choosing locations – Housing prices – Level of political participation – Level of volunteerism 12/1/2009 16
Slide 17: Payoffs for States: Economic Growth Improving the quality of education for low  performing students would have a huge payoff Increase in GDP Over 10 Years National Impact of Eliminating Gaps, in Billions $700  $670  $525  $310  $400  $425  Racial Gap Lower Estimate 12/1/2009 Income Gap Upper Estimate Low Performing States Source: McKinsey & Company, “Economic Impact of the Achievement Gap in America’s Schools,” 2009 17
Slide 18: Overview Why are these numbers so large? How would better education payoff  for Rhode Island? How can we get there from here?  12/1/2009 18
Slide 19: Education Payoff for Rhode Island Rhode Island has one of the nation’s largest  racial achievement gaps. Achievement in Rhode Island lags the national  average. What if the state could close these gaps? 12/1/2009 19
Slide 20: Education Payoff for Rhode Island Closing racial achievement gaps could increase  statewide earnings by between $315 – $430  million – Improving black performance to that of white  students: $95 – $130 million – Improving Hispanic performance to that of white  students: $220 – $300 million 12/1/2009 20
Slide 21: Education Payoff for Rhode Island Reaching the national average could increase  statewide earnings by between $380 – $515  million  – Improving the state’s performance to that of  Connecticut: $800 million – $1 billion – Improving the state’s performance to that of  Massachusetts: $1.5 – $2.1 billion 12/1/2009 21
Slide 22: Overview Why are these numbers so large? How would better education payoff  for Rhode Island? How can we get there from here?  12/1/2009 22
Slide 23: Getting There from Here World‐class standards will aligned assessments Robust data‐sharing, transparency Intense focus on teacher and leader quality Vigorous new school creation Truly dramatic changes for failing schools Dynamic funding system 12/1/2009 23
Slide 24: Dynamic Funding System Transparency Money following children Funding based on needs Change over time as enrollment changes Incentives to get results, especially for poor  children 12/1/2009 24
Slide 25: PUBLIC IMPACT is a national education policy and management consulting firm based in Chapel Hill, N.C. We are a small, growing team of researchers, thought leaders, tool‐builders, and on‐the‐ ground consultants who help education leaders and policymakers improve student learning in K‐12 education. We believe that if we focus on a core set of promising strategies for change, we can make dramatic improvements for all students. For details about sources of data and calculations in this presentation please contact Dr. Hassel. Bryan_Hassel@PublicImpact.com www.PublicImpact.com