High Schools Tailored To Adults Can Help Them Complete a Traditional Diploma and Excel in the Labor Market

In 2014, the State of Indiana paid adult charter high schools a $6,600 payment per student per year. The average student in our data attends TEC for 1.08 years, and graduates attend the Excel Center longer (1.49 years) than exiters (0.96 years). While the upfront cost of enrolling an additional student is $7,111—$9,850 for graduates and $6,321 for exiters— the net cost of providing a high school education is lower as students pay additional taxes throughout their working career, particularly during their highest earning mid-career years. For this analysis, the authors estimate the gains (and losses) from enrolling in and graduating from The Excel Center in the first 20 quarters after enrollment. They then follow Hendren and Sprung-Keyser (2020) in assuming that the relative return in years 6–40 (i.e., the typical applicant’s remaining working career) is equal to the year-5 return, and model the lifecycle evolution of earnings for the non-enrolled group using population average incomes of high school non-completers by age in the 2015 ACS. They discount future earnings with an annual discount rate of 3%. In estimating the impacts of the program on taxes and transfers, they use CBO estimates linked to the 2016 federal poverty threshold for a household of two ($16,151).

Dividing the willingness to pay by the net cost, the authors get an MVPF estimate of $34,063 / $1,648 = 20.7.

Unsurprisingly, the magnitude of the MVPF depends on the length of time that effects persist. Because the program affects educational attainment, we assume gains persist through retirement. The estimate is sensitive to how the authors assume effects persist into the future. For instance, if the year-5 effect persists in levels, rather than as a proportion of the comparison group average earnings, then the estimated MVPF is 6.28 (95% CI of 3.37 to 10.93).