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* Medical insurance, food stamps, prison among costs
* Lifetime earnings of dropouts one-third of college grads
CHICAGO, Dec 7 (Reuters) - High school dropouts on average receive $1,500 a year more from government than they pay in taxes because they are more likely to get benefits or to be in prison, according to a U.S. study released on Wednesday.
"Dropping out of high school before receiving a high school diploma places a substantial fiscal burden on the rest of society," wrote Andrew Sum of Northeastern University, an author of a study of Illinois and Chicago residents done on behalf of the Chicago Urban League and some education groups.
The findings, based on U.S. Census Bureau data from 2009-2010, illustrate the cost advantage of programs that persuade dropouts to re-enroll in school instead of becoming a financial drain on society, the study's sponsors said.
The cost of getting a high school dropout back to school and through to graduation is $13,000 a year, or roughly $33,000 total, said Jack Wuest of the Alternative Schools Network, one of the study's sponsors.
And yet over a dropout's entire working life, he or she receives $71,000 more on average in cash and in-kind benefits than paid in taxes. The societal costs may include imprisonment, government-paid medical insurance and food stamps.
In contrast, high school graduates pay $236,000 more in taxes than they receive in benefits, and college degree holders pay $885,000 more in taxes than they receive.
Lifetime earnings of dropouts totaled $595,000, the study found, compared to $1,066,000 earned by high school graduates and $1,509,000 by those with a two-year junior college degree.
In Illinois, the fifth-most-populous U.S. state with nearly 13 million residents, 11.5 percent of adults aged 19 to 24 left school without earning a high school diploma, and 15 percent in that age group dropped out in Chicago.
The highest dropout rates were among black and Hispanic men, at up to 30 percent.
High school dropouts accounted for 51 percent of Illinois' prison population, the study found.
The cost of housing an inmate is $22,000 annually, and adds up to more than $1 billion a year for the 46,000 prisoners being held in the state, according to state statistics.
Among men aged 18 to 34, 15 percent of the dropouts were in prison, an incarceration rate that was five times higher than high school graduates'.