ABSTRACT
Research and policy documents clearly show that a high proportion of low-skilled persons has negative effects on economic growth and entail high fiscal and societal costs. Being aware of these adverse effects, the European Union defined reducing the rates of early school leaving as well as fighting poverty and social exclusion as two of five headline targets in the EU-2020-Strategy (former Lisbon Strategy 2000). In a first step, the following book section outlines the state of research on the costs of early school leaving. The literature review shows that research in this field has a long tradition in the United States, Canada and Australia. For Europe, comparative studies are still rare because of the lack of both a standardized European definition of poor education and adequate data. From a macro perspective, early school leaving is linked to lower rates of economic growth, lower tax revenues, higher unemployment and welfare payments, and higher expenditures on public health and criminal justice. In a second step the chapter presents a cost-benefit analysis of measures, which aim at tackling early school leaving. These analyses provide evidence that measures are more effective when implemented at an early stage of the educational career. The chapter concludes with a summary and a brief outlook.
