An Economic
Assessment of Kirwan
Commission
Recommendations

NOVEMBER 2019
Sage Policy Group, Inc.
Commissioned by: Strong Schools Maryland

An Economic Assessment of Kirwan Commission Recommendations

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 Executive Summary
➢ Translating Educational Outcomes into Economic Ones
What are the Economic Implications of Educational Reform in Maryland?
Strong Schools Maryland commissioned Sage Policy Group, Inc. (Sage) to assess the economic and fiscal
implications of recommendations promulgated by the Maryland Commission on Innovation & Excellence in
Excellence, more commonly known as the Kirwan Commission. This report takes no view regarding the
merit of any individual recommendation nor their collective appeal.
Rather, this is purely an exercise in translation. In the process of advancing a set of reforms to public
education in Maryland, Commission members also established the likely level of improvement in academic
performance if recommendations are implemented with fidelity. Sage has endeavored to map those
educational improvements to economic and fiscal ones, establishing the State’s payback period in the process.
There are a number of reasons that better educational outcomes translate into superior economic ones:
➢ Higher educational attainment is associated with higher lifetime incomes. The net present value of the
lifetime earnings of someone with less than a high school diploma is roughly $450,000. That figure
increases to $950,000 for someone who attends some college or obtains an associate degree, $1.7 million
for someone with a bachelor’s degree, and $2.4 million for a graduate or professional degree.
➢ Under the reform, high school students will be able to obtain vocational certificates, allowing for
smoother entry into skilled trades;
➢ Higher educational levels inversely correlate with the need for public services and criminal behavior,
reducing costs of public assistance (e.g., Medicaid, food stamps, TANF) and incarceration; and
➢ Broader availability of pre-K would free more parents to expeditiously return to the labor market.
Here are some key analytical findings, most of which are also summarized in Exhibit ES-1:
➢ Under the status quo, a representative cohort of Maryland public school students (about 69,000 students)
arriving in ninth grade could be expected to pay $8.9 billion in State and local taxes over a lifetime.
Given improved educational outcomes and attainment, this same group would pay an estimated $12.5
billion State and local taxes;
➢ Differences in outcomes are even starker when one considers various forms of social assistance. Today,
a representative cohort of students would be associated with $5.7 billion in Maryland State and local tax
payments in excess of receipts from social assistance. With the anticipated results of reform, this same
group would be associated with $10.2 billion in total State and local taxes in excess of social assistance;
➢ By FY2033, State and local authorities will have cumulatively invested $25.8 billion more in public
education than they will have received in offsetting revenues through expanded earnings and higher labor
participation. That fiscal year represents the peak of educational expenditure over countervailing
revenue;
➢ Annual fiscal benefits first exceed the annual costs of Commission recommendations as early as FY2034;
➢ By FY2038, the level of annual net fiscal benefit to State and local governments peaks;
➢ By FY2046, Maryland will have more than fully recovered its investment in public education reform.

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 Exhibit ES-1. Estimated Net Costs and Fiscal Benefits of Implementing the Commission Recommendations (Millions $2020)

Year

Costs

Prekindergarten
workforce fiscal
benefits

Better school
outcome fiscal
benefits

Annual net
cost

Cumulative
net cost

FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
FY 2026
FY 2027
FY 2028
FY 2029
FY 2030
FY 2031
FY 2032
FY 2033
FY 2034
FY 2035
FY 2036
FY 2037
FY 2038
FY 2039
FY 2040
FY 2041
FY 2042
FY 2043
FY 2044
FY 2045
FY 2046
FY 2047
FY 2048
FY 2049
FY 2050

$480
$1,499
$2,684
$3,079
$3,194
$3,234
$3,323
$3,401
$3,516
$3,644
$3,832
$3,832
$3,832
$3,832
$3,832
$3,832
$3,832
$3,832
$3,832
$3,832
$3,832
$3,832
$3,832
$3,832
$3,832
$3,832
$3,832
$3,832
$3,832
$3,832
$3,832

$0
$15
$21
$27
$32
$48
$53
$57
$61
$65
$68
$68
$68
$68
$68
$68
$68
$68
$68
$68
$68
$68
$68
$68
$68
$68
$68
$68
$68
$68
$68

$0
$0
$102
$205
$307
$410
$746
$1,082
$1,419
$1,755
$2,091
$2,520
$2,948
$3,377
$3,805
$4,441
$5,077
$5,713
$6,349
$6,349
$6,349
$6,349
$6,349
$6,349
$6,349
$6,349
$6,349
$6,349
$6,349
$6,349
$6,349

$480
$1,484
$2,560
$2,847
$2,855
$2,776
$2,524
$2,262
$2,036
$1,825
$1,673
$1,244
$816
$387
($41)
($677)
($1,313)
($1,949)
($2,585)
($2,585)
($2,585)
($2,585)
($2,585)
($2,585)
($2,585)
($2,585)
($2,585)
($2,585)
($2,585)
($2,585)
($2,585)

$480
$1,964
$4,524
$7,371
$10,226
$13,001
$15,526
$17,788
$19,824
$21,649
$23,322
$24,566
$25,382
$25,769
$25,727
$25,050
$23,737
$21,787
$19,202
$16,617
$14,031
$11,446
$8,861
$6,276
$3,690
$1,105
($1,480)
($4,066)
($6,651)
($9,236)
($11,822)

➢ Maryland’s Educational Status Quo is Not Working
Lackluster Economic Performance Accompanies . . .
Whatever one believes about the Kirwan Commission and its recommendations, it is clear that Maryland
needs to shift away from its status quo. A bit more than a quarter century ago, the Massachusetts Education
Reform Act of 1993 took effect. The Act mandated sweeping changes to public education in the
Commonwealth. Like proposals for educational reform in Maryland, there was a hefty price-tag in the
billions of dollars.
Perhaps counterintuitively, at the vanguard of developing and insisting upon the Massachusetts’ reforms was
a group of business leaders. The Commonwealth’s reforms are largely credited to the Massachusetts Business
Alliance of Education (MBAE). These business leaders embraced the view that for Massachusetts’ economy
to flourish, public education needed to improve dramatically.

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 When the movement to reform public education in Massachusetts took hold, Maryland and Massachusetts
were home to economies that were roughly equivalent in terms of performance. For instance, in 1993,
Massachusetts boasted the 5th highest per capita personal income of any state and Maryland ranked 6th. At
that time, annual per capita personal income in Massachusetts was less than $250 greater than in Maryland.
By 2018, this gap had widened to more than $8,300. Rather than sink the Massachusetts economy,
educational reform has been associated with a Massachusetts miracle, one that has been associated with a
massive boom in innovation in and around Boston and the rejuvenation of New England’s largest city.
Exhibit ES-2: Personal Income & GDP per Capita, 1993 & 2018, MD v. MA
Personal Income per Capita
% Change 1993 Rank 2018 Rank
1993
2018
Maryland
$25,239 $63,354
151%
6
7
Massachusetts
$25,471 $71,683
181%
5
3
Source: U.S. Census Bureau, Sage

. . . Unacceptable Educational Outcomes
According to the U.S. Census Bureau, Maryland is home to the 4th highest proportion of persons aged 25+
with a bachelor’s degree and 3rd highest proportion of persons aged 25+ with an advanced degree among the
50 states and the District of Columbia. But while the parents are highly educated by global standards, the
State’s children achieve only mediocre academic results and outcomes are deteriorating.
In 2019, only 39 percent of Maryland’s 4th graders were deemed proficient or better at mathematics according
to the National Assessment of Education Progress (NAEP). That was 1 percentage point below the nation
and placed Maryland in a six-way tie for 29th among U.S. states & D.C. In 2013, 47 percent of Maryland’s 4th
graders were at or better than proficient in mathematics, 6 percentage points above the national average and
17th among all states. From 2013 to 2019, Maryland’s 4th graders fell from the nation’s 2nd best reading
scores, with student proficiency 9 percentage points above the national average to tied for 24th with scores
roughly equal to the nation’s. In 8th grade, Maryland’s reading scores fell from tied for 3rd to 17th.
Maryland’s student outcomes are mediocre in a nation that itself is subpar along the dimension of educational
outcomes. Nearly half of U.S. millennials achieved below the minimum literacy skill level necessary to
succeed in the 21st century and American students continue to falter on tests administered internationally.
In short, Maryland is rapidly backtracking in both absolute and relative terms on both national and
international bases. By contrast, Massachusetts’ 4th and 8th graders have scored first or second place on
NAEP tests in 4th and 8th grade reading and mathematics since 2005 and are competitive with students from
anywhere in the world.
Educational reform has the potential to place Maryland’s economy on a different trajectory. That would be
most welcome given the lack of dynamism in Maryland’s economy relative to a number of peer group states
and the utterly discouraging educational outcomes attached to the state’s public-school students and
graduates.

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 Table of Contents
Executive Summary ............................................................................................................................................. 2
Introduction .......................................................................................................................................................... 7
I. The Commission on Innovation & Excellence in Education ................................................................. 9
II. The Role of Education and Human Capital in a Knowledge-Based Economy ............................... 15
III. The Current Status of Outcomes for Maryland Public-school Students ......................................... 23
IV. Evidence Based Research on Public-school Interventions ................................................................ 37
V. Estimated Impacts of Commission Recommendations ....................................................................... 45
VI. Costs & Benefits of Commission Recommendations ......................................................................... 54
Conclusion........................................................................................................................................................... 61
Appendices .......................................................................................................................................................... 62
References ........................................................................................................................................................... 73

List of Exhibits
Exhibit ES1. Estimated Net Costs and Fiscal Benefits of Implementing the Commission Recommendations (Millions
$2020) ..................................................................................................................................................................................... 3
Exhibit ES-1: Personal Income & GDP per Capita, 1993 & 2018, MD v. MA ................................................................... 4
Exhibit 1. Median Hourly Wage by Educational Attainment, 1980 – 2018....................................................................... 17
(2018 Dollars) ...................................................................................................................................................................... 17
Exhibit 2. Earnings by Educational Attainment as a Percentage of Earnings of a High School Graduate ...................... 17
Exhibit 3. Share of Jobs by 2020 that will Require Postsecondary Education by Specific Level Versus Current Publicschool Outcomes and Adult Residents ............................................................................................................................... 18
Exhibit 4. Initial Outcomes for Students Entering High School in 2010 .......................................................................... 23
Exhibit 5. College Pathways and Outcomes....................................................................................................................... 24
Exhibit 6. Ultimate Educational Attainment for Cohort of Students Entering High School in 2010 .............................. 25
Exhibit 7. Graduation Rates and Proficiency by Maryland School District ....................................................................... 25
Exhibit 8. Economic Characteristics and Educational Attainment, Maryland 2017 .......................................................... 27
Exhibit 9. Economic Characteristics and Educational Attainment, Maryland 2017 .......................................................... 28
Exhibit 10. Lifetime Earnings and Productivity Impacts (Net Present Values in Thousands) ......................................... 30
Exhibit 11. Lifetime tax Payments, Federal, State & Local (Net Present Values in Thousands) ...................................... 30
Exhibit 12. Educational Attainment and Public Assistance, Maryland .............................................................................. 32
Exhibit 13. Educational Attainment and Lifetime Costs of Public Assistance, Maryland................................................. 33
Exhibit 14. Educational Attainment and Lifetime Costs of Incarceration, Maryland ....................................................... 35
Exhibit 15. Economic and Fiscal Impacts and Social Costs of Current Student Outcomes (Millions $2017) ................. 36
Exhibit 16. Educational Interventions and Their Benefits and Costs ............................................................................... 41
Exhibit 17. Comparison of Estimated Outcomes for Current Maryland Public-school Students and Outcomes Resulting
from Implementation of Commission Recommendations ................................................................................................. 46
Exhibit 18. New Steady-State in Maryland and Associated Estimates of Economic and Fiscal Impacts for Future
Cohorts of Entering High School Students (Millions $2017) ............................................................................................. 47
Exhibit 19. Employment Characteristics of Families, 2018 ............................................................................................... 49
Exhibit 20. Projected Enrollment in Pre-kindergarten Programs ...................................................................................... 50
Exhibit 21. Projected Enrollment in Pre-kindergarten Programs ...................................................................................... 51
Exhibit 22. Pre-kindergarten Mothers Participating in the Labor Force ........................................................................... 51
Exhibit 23. Earnings and Tax Payments of Employed Mothers (Millions $2020) ............................................................ 52
Exhibit 24. Total Fiscal Impacts of Employed Mothers (Millions $2020) ......................................................................... 53

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 Exhibit 25. Estimated Costs of Implementing each Commission Recommendations (Millions $2020) ........................... 55
Exhibit 26. Impacts of Commission Recommendations on Average Lifetime Earnings and Fiscal Benefits (Millions
$2020) ................................................................................................................................................................................... 56
Exhibit 27. Milestones in Commission Impacts and Effects on Educational Attainment ................................................ 57
Exhibit 28. Estimated Net Costs and Fiscal Benefits of Implementing the Commission Recommendations (Millions
$2020) ................................................................................................................................................................................... 60
Exhibit A-1. Maryland Educational Attainment Trends, 1970-2017 ................................................................................. 62
Exhibit A-2. Maryland Educational Attainment as Percentage of U.S., 1970-2017 .......................................................... 63
Exhibit A-3. Median Earnings and Workforce Characteristics, Maryland v. US, 2017 ..................................................... 63
Exhibit A-4. Estimated Average Earnings by Educational Attainment ............................................................................. 64
Exhibit A-5. Median and Average Earnings by Educational Attainment, Maryland, 2017 ............................................... 64
Exhibit A-6. Lifetime Earnings of Maryland Adults .......................................................................................................... 65
Exhibit A-7. Characteristics of U.S. Families with Children Under 18, by Receipt of Government Means-Tested
Assistance, 2014 ................................................................................................................................................................... 65
Exhibit A-8. Educational Attainment and Poverty, 2017 .................................................................................................. 66
Exhibit A-9. Educational Attainment and Public Assistance, U.S. 2016, Receipt of Select Governmental Assistance by
Level of Education, Ages 25–34 (Percent Receiving Public Assistance) ............................................................................ 66
Exhibit A-10. SNAP in Maryland, 2017 ............................................................................................................................. 67
Exhibit A-11. TANF in Maryland, 2016/2017................................................................................................................... 67
Exhibit A-12. Medicaid in Maryland .................................................................................................................................. 67
Exhibit A-13. Educational Attainment and Health Insurance in the U.S., 2017 ............................................................... 68
Exhibit A-14. State and Local Spending on Housing and Energy Assistance .................................................................... 69
Exhibit A-15. Educational Attainment and Incarceration ................................................................................................. 69
Exhibit A-16. Maryland Population 25 Years and Older and Incarceration, 2017 ............................................................ 70
Exhibit A-17. State Incarceration and Community Supervision Costs, FY2018 ............................................................... 70
Exhibit A-18. Lifetime State Incarceration and Community Supervision Costs per Prisoner .......................................... 71
Exhibit A-19. Lifetime State Incarceration and Community Supervision Costs per Adult Marylander ............................ 72

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 Introduction
Strong Schools Maryland commissioned Sage Policy Group (Sage) to assess the economic and fiscal
implications of recommendations promulgated by the Maryland Commission on Innovation &
Excellence in Education. The Commission is better known as the Kirwan Commission, named after
its chairman William E. Kirwan, who served as Chancellor of the University System of Maryland
from 2002-2015.

➢ Analytical Approach
This report embodies the study team’s efforts to translate projected educational outcomes into
economic and fiscal ones. The essential task which Sage has undertaken in this project is the
translation of the potential effects and impacts of the Commission’s recommendations into
monetary values. This has been done in part to help legislators understand the impacts of Kirwan
Commission implementation on State of Maryland and local government revenues. Much has been
made of the proposed costs of implementation, but little has been offered to date regarding
countervailing revenues.
Importantly, the analysis takes as given the various findings and conclusions of the Commission
regarding projected educational outcomes. As a prime example, the Commission estimated the costs
of implementing its recommendations. Sage has not endeavored to separately estimate the cost of
proposed investments/expenditures. Again, this is above all an effort at translating educational
outcomes into economic ones. While our review of data regarding student achievement indicates
that something is terribly amiss in public education in Maryland, it is not the objective of this report
to advocate for any specific type of reform, including recommendations emerging from the Kirwan
Commission.
The analysis embraces a comprehensive view of the relationships between education, earnings,
household spending power, and the cost of delivering public services. The correlation between
greater educational attainment and bolstered earnings is well established. Less well understood is the
correlation between educational attainment and increases or decreases in demand for a host of
public services, including public assistance.
While some research is available to guide estimates of these reduced demands, it is difficult to
measure the full extent of the relationship between education and these public costs. For example,
as discussed below, the population of state prisoners is disproportionately comprised of individuals
who failed to graduate from high school. Relatively few college graduates end up in state prisons.

An Economic Assessment of Kirwan Commission Recommendations

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 Accordingly, reducing the number of high school dropouts will presumably reduce the costs of
incarceration in state prisons. Fewer state prisoners is almost certainly likely to correlate with
reduced demand for services throughout the criminal justice system for jails, prosecutors and public
defenders, court time, and public safety services. Measuring these other effects of better educational
outcomes represents the essence of this analysis.
The literature is replete with analyses regarding the effects of educational attainment on earnings and
public services and on the effectiveness of reforms and intervention in improving educational
outcomes. This in turn can generate significant effects on economic and social conditions.
An especially useful example of such an analysis is an assessment of the costs and benefits of public
schools in Colorado, which also adopts a holistic view of the relationships between educational
attainment and socioeconomic conditions. The report also highlights the potential for productive
interventions that help elevate educational attainment.1 Sage found the Colorado report to be
useful in terms of supplying a logical analytical framework.
Also instructive is the comprehensive reform undertaken by Massachusetts starting a bit more than a
quarter-century ago, as well as the commitment of Washington D.C. to widespread access to prekindergarten.
Much of Sage’s work analyzes the correlation between levels of education and economic, fiscal, and
public service impacts at the level of the individual. Summing predicted impacts across individuals
supplies a sense of how implementation of Kirwan Commission recommendations would alter the
size and structure of Maryland’s economy if predicted educational outcomes come to pass,
potentially producing a larger tax base while simultaneously diminishing the demand for certain
government services. However, such an approach may ultimately underestimate socioeconomic
impacts since there are likely to be altered interactions between individuals, including positive role
model effects that are difficult to measure and predict.

1

Belfield, Clive R., and H. M. Levine. “The Fiscal and Social Burden of Inadequate Education in Colorado.” 2011.

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 I. The Commission on Innovation & Excellence in Education
Created by Maryland’s legislature in 2016, the Commission on Innovation & Excellence in
Education is charged with generating recommendations for improving public education in Maryland.
Those improvements are intended to help Maryland public-school students meet the challenges of a
continuously shifting global economy, respond to the needs of Maryland’s evolving labor force
requirements, and be better prepared for post-secondary education if that is a preferred option for
the individual.
In other words, Commission recommendations are intended to help students succeed in college and
careers whatever their preferences and proclivities. This includes offering opportunities to pursue
career technical education and accompanying vocational certificates as an alternative to college. In
the context of broadly crafted directives, the Commission developed policies, associated
implementation strategies, and funding formulas designed to create a world-class public-school
system in the service of all Maryland public-school students.2
The Commission includes many of Maryland’s leading citizens, including educational leaders from
across the state, members of the state legislature, and a prominent corporate CEO. Chaired by
William Kirwan, Chancellor Emeritus of the University System of Maryland, the Commission is
popularly known as the Kirwan Commission.
The Commission has been interested in more than positioning Maryland as a leading system within
the United States. The Commission endeavors to position Maryland at the highest tier globally.
Accordingly, the Commission has analyzed top-performing school systems across the U.S. along
with educational structures in Ontario (Canada), Finland, Singapore, and Shanghai (China)
demonstrating excellence in education.

Much of the discussion of the origins and work of the Commission is derived from the Maryland Commission on
Innovation & Excellence in Education, “Interim Report,” January 2019. Other materials created for the Commission
were instrumental, particularly, National Center on Education and the Economy, “How Does Maryland Stack Up? A
Gap Analysis Comparing Maryland to International and Domestic Top Performers,” 2018.
2

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 ➢ The Current State of Maryland’s Public-schools
By examining the results of testing protocols that are utilized across the United States, the
Commission determined that despite some productive innovations at individual schools and
instances of effective leadership, the entire Maryland public-schools system has been performing
near the middle of the pack of all states in reading and math. The National Assessment of
Educational Progress assesses learning outcomes for fourth and eighth graders in the U.S. every two
years. Not only were these scores in the middle ranks for all states, but Maryland was also the only
state where the scores declined from 2013-2015.
This lackluster record relative to other states does not improve when the context is broadened to
encompass students from around the world. The Program for International Student Assessment
routinely measures 15-year-old student learning in math, reading, and science in dozens of nations.
As the Commission reported, in a recent round of testing, American students performed at just
above the median level for students in 72 countries.
In short, the Commission reached the conclusion that Maryland public-school students have been
performing at a mediocre level relative to their American peers. American students, in turn, have
been performing at a mediocre level relative to their peers around the globe. This
underperformance was determined to be widespread, affecting at least some schools in each of
Maryland’s 24 school districts.
Problems extend well beyond the performance of students. The Commission identified major
shortages of teachers, especially for science and mathematics. More than half of new teachers have
been recruited from beyond Maryland. Based on several national studies, the Commission
concluded that school funding in the state is regressive; i.e., unfair to poor communities and their
students.

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 ➢ Gaps in Maryland’s Public-school System
With support supplied by the National Center on Education and the Economy (NCEE), the
Commission analyzed gaps in Maryland’s educational policies and practices in comparison to four
well-respected and high-performing international school systems—Finland, Ontario (Canada),
Shanghai (China), and Singapore—and in comparison to systems in New Jersey, New Hampshire,
and Massachusetts.3 This gap analysis examined a series of “building blocks” that NCEE finds to
be essential to creating high-performing schools that produce world-class student outcomes.
•

Strong supports for children and their families before students arrive at school;

•

More resources for at-risk students;

•

Instructional systems and gateways;

•

Abundant supplies of highly qualified teachers with the necessary dispositions, knowledge, and
skills;

•

Schools that treat teachers as professionals with incentives and support for continuous
improvement;

•

Effective systems of career and technical education and training;

•

Leadership development systems to develop leaders at all levels; and

•

Governance system to develop powerful policies and implement them at scale, holding the
state, school districts and schools accountable for faithful implementation and outcomes.

The gap analysis supplies numerous recommendations designed to help Maryland create a worldclass public-school system. Salient observations garnered from the gap analysis are discussed in the
paragraphs that follow.
Critically, in many other nations, support for children and families before students arrive at school
includes maternal and child health services, parental education, paid parental leave, and other
services that are often difficult to access in the United States. High quality childcare is another
valued support that is available in the U.S., but at costs often higher than those in benchmark
countries. Recommendations for Maryland include expanding the reach and scope of support
services for children ages 0 to 3 years and their families, making childcare for working families
affordable, enhancing the professionalism of early childhood educators, and expanding enrollment
in quality pre-kindergarten programs.

National Center on Education and the Economy, “How Does Maryland Stack Up? A Gap Analysis Comparing
Maryland to International and Domestic Top Performers,” 2018.
3

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 The gap analysis notes that high-performing international systems fund education more equitably
than any U.S. state. For example, extra teachers in these systems are assigned to work with highneeds students on a continuous basis. Recommendations for Maryland are to supply those required
resources to at-risk students and to distribute funding and resources in a manner that reduces the
gap between the lowest performing quartile of students and the highest performing.
A common theme in high-performing school systems around the world is highly qualified teachers.
Accordingly, recommendations for Maryland include sourcing teachers from the top of high school
graduating classes, considering requiring elementary school teachers to specialize in either
mathematics/science or the humanities, developing career ladders for teachers and school leaders,
and creating incentives for top-tier students to study to become teachers.
The gap analysis draws parallels between teaching as a profession and (other) high-status professions
associated with similar training requirements and responsibilities. The analysis recommends
narrowing the gap in compensation between teaching and these other professions and enriching
professional development opportunities for teachers to supply ongoing opportunities for teachers to
improve skills and qualifications.
Career and technical education is a hallmark of the international top-performing school systems.
These systems often enroll 40 percent or more of high school students in career and technical
education programs. These programs are viewed as gateways to both employment and postsecondary education that supports that employment.
Industries involved in either fashioning these programs or employing their graduates cover a broadspectrum including banking, healthcare, and high-tech manufacturing. An effective career and
technical education program in Maryland would overcome the impression that such programs are
often for students who struggle academically. Instead, the policy objective is to frame these
programs as providing more applied forms of education for those who want to start careers
immediately following high school graduation. Accordingly, the Commission recommended
modernizing current career and technical education program offerings so that programs of study
result in recognized industry certifications for jobs in high-skill, high-wage areas.
The gap analysis also examines how to maintain excellence in school systems. In this context, the
quality of school leadership is critical. Recommendations for Maryland include an effective system
for identifying and developing those who would be effective principals able to manage professionals.
Among other things, the Commission’s report recommends investments in teachers with leadership
potential and providing a career ladder that channels and nurtures that potential. Another set of
recommendations focuses on the creation of governance structures that produce the plans, policies,
and procedures that would build in accountability, quality assurance, and continuous improvement.
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 ➢ Recommendations to Create a World-Class Public-school System
In its January 2019 report, the Commission organizes recommendations into five broad categories.
These recommendations supply significant detail regarding policies, practices, and procedures that
Maryland should undertake to create a world-class public-school system. The following discussion
highlights key elements of these recommendations.
Policy Area 1 addresses early childhood education. The focus of this group of recommendations is
the creation of pre-kindergarten programs for three-year-olds and four-year-olds across Maryland.
These programs would be free for the lowest income families and be available on a sliding scale for
more affluent families. When fully implemented in 2030, these pre-kindergarten programs would
serve more than 80,000 children in Maryland.
To provide additional support for low-income families, the Commission proposes significant
expansions of Family Support Centers and Judy Centers. These facilities coordinate the delivery of a
wide array of health and social services to families with children. In some instances, agencies or
organizations providing those services are also located within the centers so that barriers to receiving
services are minimized. The Commission further proposes expanding a program for Maryland
infants and toddlers who have been identified as exhibiting delayed development.
The intent of these recommendations is to better prepare young Marylanders for school and
learning. As demonstrated by top-performing school systems around the world, these early
interventions represent cost-effective methods for resolving learning issues early and tend to reduce
the need for more expensive remediation later in students’ educational careers.
Policy Area 2 focuses on high quality and diverse teachers and leaders. This recommendation
includes more rigorous teacher preparation programs and higher standards for licensing new
teachers in Maryland.
Incentives (e.g., scholarship and loan assistance for students in teacher preparation programs) are
recommended so that highly skilled and diverse teachers can be placed in high-need schools. Several
recommendations seek to raise the overall status of teaching so that prospective teachers can be
drawn from a diverse and highly qualified pool of candidates.
The Commission recommends that compensation for teachers should be aligned with other highstatus occupations with similar stringent training and educational requirements. Another aspect of
this policy area is the creation of career ladders that encourage professional development and
provide incentives for teachers and school leaders to improve credentials and performance.
Policy Area 3 addresses college and career readiness, including through the provision of career and
technical education. Any career and college readiness standard should be consistent with global
standards that assure the necessary English and mathematics skills to succeed in postsecondary
Maryland institutions.
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 An element of this set of recommendations is to provide supplemental instruction to kindergarten
through third grade students who are struggling learners. This represents a kind of early warning
system designed to resolve learning issues as early as possible and avoid later, more difficult and
expensive remediation.
Similarly, the Commission calls for alternative approaches for older students who are unlikely to
meet college and career readiness standards by the end of the 10th grade. For students who meet
college and career readiness standards, recommendation would require local school systems to
provide robust academic and career pathways during the final years of high school.
Another aspect of this recommendation is the creation of a committee comprising state agency,
community college, and industry leaders charged with creating a world-class career and technical
education (CTE) system for Maryland. The CTE program would be developed in concert with
Maryland economic development, workforce development, and relevant agencies so that it can
support the evolving and emerging industries of the 21st century.
Policy Area 4 is concerned with closing gaps between the highest performing schools and those that
struggle. Related recommendations include policies and procedures to provide appropriate levels of
funding to schools with concentrated poverty. All school staff would be trained to identify students’
mental health and related problems and make appropriate referrals to service providers. Other
recommendations address funding issues related to special education to achieve greater parity as well
as funding for English learner students and for compensatory education.
Policy Area 5 recommends establishing an Independent Oversight Board with staff capacity to
assure that Commission recommendations are faithfully implemented and that the desired effects
and results are achieved. This Board would be authorized to develop a comprehensive
implementation plan that would engage a wide range of educational and other institutions in
implementation and hold all responsible and accountable for their participation. Further, the Board
would be vested with the responsibility and authority to send support teams to districts and schools
that are struggling and, in the final analysis, to withhold funds from districts or schools that resist or
otherwise fail to implement the Commission recommendations. Finally, the Board will have the
responsibility to report to the General Assembly and the Governor on a regular basis and
recommend mid-course corrections that may be required based on experience.
Associated recommendations also charge the state education department with monitoring student
progress and identifying areas of inadequate performance. A Career Technical Education
Committee would be charged with the oversight of that program and its successful collaboration
with the state’s community colleges and other workforce development programs (e.g.,
apprenticeships). Similarly, governance and accountability would be concerned with teacher
preparation programs and their ability to upgrade the profession.

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14

 II. The Role of Education and Human Capital in a Knowledge-Based Economy
The term knowledge-based economy refers to trends in the world’s advanced economies towards a
greater dependence on knowledge, information, and high-skill levels to produce value and economic
growth. In the transition from an agrarian economy to an industrial economy to a knowledge-based
economy, the value of human capital as a factor in economic productivity and growth has become
increasingly important. Human capital can be defined as the cognitive skills that are increasingly
critical to success in a knowledge-based economy, particularly literacy and numeracy.
These trends towards a dependence on knowledge, information, and human capital have placed
greater emphasis on post-secondary educational attainment. From 1970 to 2017, the percentage of
adult Marylanders with a college degree increased from 14 percent to 40 percent. Alternatively,
during that same period, the share of adult Marylanders who did not complete high school fell from
48 percent to 10 percent. (See Exhibit A-1 in Appendix.) As discussed elsewhere in this report,
higher levels of education are routinely associated with higher earnings and more active participation
in the labor force.
The growing share of Marylanders with college degrees is in large measure a function of welleducated individuals moving to Maryland as opposed to Maryland public-schools creating welleducated residents. As discussed below, about one-quarter of current Maryland public-school
students go on to earn four-year or advanced degrees. Thus, to achieve its status as a highly
educated state, Maryland must import well-educated residents.
This disparity between the ultimate educational attainment of Maryland public-school students and
the educational attainment of Maryland residents is further complicated by recent National
Assessment of Educational Progress (NAEP) scores. This biennial survey of fourth and eighth
grade students across the nation indicated declines in 2019 proficiency scores from 2017 in reading
for fourth graders (from 40 percent in 2017 to 35 percent in 2019) and eighth graders (from 38
percent in 2017 to 36 percent in 2019).
Proficiency scores in math were somewhat better, declining from 42 percent in 2017 to 39 percent in
2019 for fourth graders and holding steady at 33 percent for eighth graders in both years. Since the
economy demands better educated and more proficient workers, the ability of Maryland publicschools to produce students who are proficient in reading and math is problematic. The State of
Maryland is in the process of creating many members of a lost generation–a generation that will
have little opportunity to improve upon the living standards of their parents–a generation that may
come to be highly dependent on public assistance.
An Economic Assessment of Kirwan Commission Recommendations

15

 Neighboring Washington, D.C. countered the national pattern of declining scores with proficiency
scores in reading and math that increased in three of four categories for fourth and eighth graders.4
Notably, Washington, DC implemented universal pre-kindergarten for three- and four-year-olds in
2009. Kirwan Commission recommendations embody that policy initiative.
The relationship between the knowledge-based economy and post-secondary education is complex.
While there is a clear link between four-year and advanced degrees and the knowledge-based
economy, it is possible to earn relatively high salaries without a four-year college degree. Several
recent articles highlight high-paying jobs that are available without a four-year degree. These jobs,
however, demand substantial human capital; that is, the literacy and numeracy that allow for the
completion of routine work tasks and the acquisition of new knowledge as work evolves. These
high-skill levels typically require postsecondary training, apprenticeships, or other vocational training
leading to vocational certificates, exam-based licenses, or other documentation of acquired skills.5
While earning a good salary without a four-year or advanced college degree is possible, overall trends
for economic success have clearly favored those with higher educational attainment. Since 1980, the
economic rewards for those with at least four-year college degrees have been significant, particularly
for those with advanced degrees. Conversely, those who have failed to achieve four-year college
degrees have experienced significant reductions in real wages. As noted in Exhibit 1, those whose
education stopped with a high school diploma have witnessed a 13 percent drop in real wages while
those failing to complete high school have seen a 20 percent drop. Even those with some college
have experienced a 12 percent reduction in real wages.6
These trends in real wages have contributed to greater inequality between those with four-year or
advanced degrees and those with less educational attainment. In 1980, someone with a Bachelor’s
degree earned about one-third more than someone with a high school diploma, while someone with
an advanced degree earned over 50 percent more.

Richman, Talia, “'Frankly, devastating’: Maryland reading scores decline on national assessment,” The Baltimore Sun,
October 30, 2019 https://www.baltimoresun.com/education/bs-md-naep-score-release-20191030vyfuhrsfq5egviee35g42e2fxq-story.html
5 Examples of this recent media coverage include Renzulli, Kerri Anne, “The 10 highest-paying jobs you can get without
a college degree all pay more than $79,000,” April 24, 2019 https://www.cnbc.com/2019/04/24/the-10-highestpaying-jobs-you-can-get-without-a-college-degree.html and Suneson, Grant, “Almost $100K per year: Highest-paying
jobs you can get without a college degree,” July 21, 2019.
https://www.usatoday.com/story/money/careers/2019/07/21/highest-paying-jobs-you-can-get-without-a-collegedegree/39701321/.
6 Congressional Research Service, “Real Wage Trends, 1979 to 2018,” updated July 23, 2019
https://fas.org/sgp/crs/misc/R45090.pdf.
4

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 Exhibit 1. Median Hourly Wage by Educational Attainment, 1980 – 2018
(2018 Dollars)

Advanced degree
Bachelor's degree
Some college
HS diploma
Less than HS diploma

1980
$29.66
$25.95
$22.46
$19.51
$16.88

2018
$36.71
$28.37
$19.80
$17.00
$13.50

% Change
23.8%
9.3%
-11.8%
-12.9%
-20.0%

Source. Congressional Research Service

By 2018, an individual with a bachelor’s degree earned two-thirds more than someone with a high
school diploma, while someone with an advanced degree earned more than twice that of an
individual with a high school diploma as the highest form of their educational attainment. Relative
earnings of those with some college barely changed in comparison to someone with a high school
diploma. Earnings for those who fail to finish high school fell further behind those who completed
high school.
Exhibit 2. Earnings by Educational Attainment as a Percentage of Earnings of a High School Graduate

1980

Advanced degree
Bachelor's degree
Some college
HS diploma
Less than HS diploma

2018

152%
133%
115%
100%
87%

216%
167%
116%
100%
79%

Source. Congressional Research Service

Given these trends, it is unsurprising that in recent years new jobs have gone to those with four-year
college degrees while the opportunities for those who have only a high school diploma or who have
failed to finish high school have decreased. Since the apex of the Great Recession in 2008, virtually
all new jobs—roughly 12 million—have been statistically filled by those with at least Bachelor’s
degrees. Approximately 2 million jobs have been filled by those with some college. There has been
a net loss of almost 5 million jobs held by those with no more than a high school diploma. 7
This trend towards a more educated workforce shows no indications of relenting. Georgetown
University’s Center on Education and the Workforce has studied changes in the economy and the

Goldstein, Steve, “Nine out of 10 new jobs are going to those with a college degree,” June 5, 2018.
https://www.marketwatch.com/story/nine-out-of-10-new-jobs-are-going-to-those-with-a-college-degree-2018-06-04.
7

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 demands of employers for years. The Center examined the educational requirements of future jobs
and the ability of the nation and each state to meet those demands.8
A Center analysis determined that 65 percent of the nation’s jobs will require post-secondary
education by 2020. In Maryland, the share of jobs requiring postsecondary education is higher, 69
percent.
Exhibit 3 compares the share of these future jobs that will require post-secondary education with the
outcomes of current Maryland public-school students and the current Maryland adult population.
The outcomes of current Maryland public-school students fall significantly below these projected
educational needs.9 As the Commission found, fewer than 40 percent of current Maryland publicschool students are college and career ready as defined by proficiency in English and math. Given
the most recent NAEP scores, the percentage of Maryland public-school students who are prepared
to be successful in earning four-year and advanced degrees is likely declining.
Alternatively, current Maryland adults also fall somewhat short, but not nearly by the margins of
current Maryland public-school students.10 The gap between the educational attainment of current
Maryland adults and the predicted outcomes of current Maryland public-school students strongly
suggests that Maryland has met, and is likely to continue to meet, its needs for human capital by
importing substantial human capital from outside the state. This has been a hallmark of Maryland
for decades as top jobs at private enterprises, research labs, universities, medical systems, and other
establishments have frequently been filled by highly-educated outsiders even as many communities
within the state have stagnated economically and many Marylanders have lacked a firm foothold in
the 21st century economy.
Exhibit 3. Share of Jobs by 2020 that will Require Postsecondary Education by Specific Level Versus Current
Public-school Outcomes and Adult Residents
Some college, Associate’s
Bachelor’s Master’s degree
degree, or postsecondary
degree
or better
vocational certificate
Maryland by 2020
29%
23%
16%
Current Maryland public-school outcomes
40%
16%
9%
Current Maryland adult residents
26%
21%
18%
Sources. Center on Education and the Workforce, National Center on Education and the Economy, U.S. Census Bureau

Center on Education and the Workforce, “recovery: Projections of Jobs and Education Requirements Through 2020,”
June 2013. https://cew.georgetown.edu/wp-content/uploads/StateProjections_6.1.15_agc_v2.pdf.
9 National Center on Education and the Economy, “How Does Maryland Stacked Up?” January 2018
10 U.S. Census Bureau, American Fact Finder.
8

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 •

A Disconnect Between Educational Attainment and Human Capital

Educational attainment has been a ready proxy measure for the acquisition of the human capital
required for a knowledge-based economy. Recent research, however, indicates that educational
attainment is an imperfect measure of the acquisition of key competencies needed to thrive in a
modern economy.
A recent study by researchers at the Center for Research on Human Capital and Education at the
Educational Testing Service (ETS) examined results of international testing for literacy, numeracy,
and other competencies.11 The Organization for Economic Cooperation and Development
(OECD) has surveyed the skills of adults in 33 advanced economies using the Programme for
International Assessment of Adult Competencies (PIAAC). This survey analyzes competencies in
literacy, numeracy, and more complex technological capacities on a five-point scale where a score of
1 represents low levels of literacy and numeracy and a score of 5 represents high levels of skill.
Because PIAAC surveys adults ages 16 to 65, researchers can analyze changes in competencies over
time. Older adults in the United States, for example, outperformed their counterparts in many other
advanced economies.
With the advent of the knowledge-based economy, many countries have invested substantially in
education and other social support systems with the goal of improving the human capital of their
younger citizens. These investments are reflected in the PIACC results for millennials, those aged
16 to 34 years. The results are striking for millennials in the United States. Despite being associated
with the highest levels of educational attainment in American history, millennials fared poorly
against their counterparts in other advanced economies.
The average score for millennials in the United States in literacy (277 out of 500) was equal to the
average for all countries surveyed. This score was well below the top scoring countries, Japan and
Finland, which each scored in excess of 300. Almost half of U.S. millennials—more than 35 million
individuals—achieved scores below Level 3, which is considered the minimum skill level to succeed in
the 21st century economy.
In numeracy, America’s score (261 out of 500) was below average for all surveyed countries (271 out
of 500) and significantly better than only four nations. Three out of five American millennials—

The discussion of PIAAC scores and their correlation with economic and social conditions is based on Sands, Anita
and Madeline Goodman, “Too Big To Fail: Millennial's on the Margins,” ETS Center for Research on Human Capital
and Education, April 2018.
11

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 translating into more than 46 million individuals—scored below Level 3 in numeracy. In short, even
as America has become more educated, it has fallen behind many other nations in terms of the
mastery of basic skills among members of the emerging workforce.
These results can be disaggregated by race and ethnicity as well as by proficiency in English. Blacks
and Hispanics, which constitute one-third of all U.S. millennials, fare worse in literacy and much
worse in numeracy. In literacy, the shares of Blacks and Hispanics scoring at or above Level 3 (29
percent and 33 percent, respectively) were roughly half of the share of Whites and other races (64
percent and 56 percent, respectively). In numeracy, the shares of Blacks and Hispanics scoring at or
above Level 3 (13 percent and 21 percent, respectively) were well below half of the share of Whites
and other races (52 percent and 47 percent, respectively) performing at that level. Results were
similar for those for whom English is not a native language.
The disparity between American millennials’ historically high levels of educational attainment and
the performance of this generation against their peers in other countries is also observable in the
skills levels of well-educated American millennials. As noted above, a score of Level 3 on PIAAC is
considered the minimum level of proficiency for acquiring the skills needed for the 21 st century
economy. For American millennials who were enrolled in an educational institution at the time of
the survey and had earned a two-year college degree or higher, 22 percent scored below Level 3 in
literacy and 37 percent scored below Level 3 in numeracy. For millennials who were not enrolled in
an educational institution and had earned two-year degrees or higher, results were similar; 21 percent
scored below Level 3 in literacy while 32 percent scored below Level 3 in numeracy.
Thus, for American millennials with college degrees, one in five had failed to acquire minimum
literacy skills and one in three failed to achieve minimum numeracy skills. For millennials with some
college but no degree, only a high school diploma, or without a high school diploma, results are
worse and become increasingly problematic as educational attainment declines.
The inter-connectedness between human capital and the economy is well established. Greater
human capital (i.e. greater proficiency in literacy, numeracy, and related skills) is correlated with
higher earnings.
Differences in skill levels also tend to increase over time. Higher skill levels are prioritized by
businesses when choosing to train workers to advance their careers. Conversely, workers with low
skills may not have the literacy or numeracy to improve their employment opportunities.

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 Impacts of human capital extend beyond purely economic matters. Research has established that
low skill levels correlate with reduced enrollment in health insurance as well as lower levels of trust,
volunteerism, and civic engagement.
•

Maryland’s Report Card

As the Kirwan Commission notes in its report, Maryland public-school students generally perform
at the average level for all U.S. public-school students. According to the Maryland Report Card, the
2017 NAEP scores for Maryland eighth grade students rated 38 percent proficient or advanced in
reading versus 35 percent for all U.S. students. For mathematics, there were similar results — 33
percent of Maryland eighth graders were rated as proficient or advanced versus 34 percent for all
U.S. students. The fact that the 2019 NAEP reading scores for Maryland fourth and eighth graders
were lower in 2019 than in 2017 reinforces the status of Maryland as performing about as well as the
national average. As is true with PIAAC scores, results for Maryland Black and Hispanic students
were substantially below those of Whites and Asian/Pacific Islanders.
These patterns persist into high school. In 2019, only 42.6 percent of Maryland public-school
students were proficient in English 10 while 27.2 percent were proficient in Algebra I.12
These conditions suggest that like U.S. millennials, Maryland public-school students are not well
prepared to thrive in a 21st century economy. With literacy and numeracy competencies that are
average at best, Maryland public-school students may struggle to maintain themselves in an economy
that not only relies on knowledge, but is also increasingly characterized by change and winner-takeall dynamics. Some of the most successful American companies have succeeded by disrupting the
status quo (e.g., Apple, Tesla, Amazon, Microsoft, Google, Facebook, Netflix, Lyft). These are the
winners. Adapting to change requires a significant proficiency in literacy and numeracy. A lack of
adaptability results in lower earnings, less stable income, and other unfortunate outcomes.
In light of these realities, the Commission has a stated goal of raising the proficiencies of Maryland
public-school students in English 10 and Algebra I to 80 percent.13 This goal would roughly double
the current proficiency achievements of Maryland public-school students and would raise the
abilities of Maryland students to the levels of the best-performing countries in the world. This goal
is designed to render Maryland public-school students college and career ready. Data from the

Maryland State Department of Education, “Maryland Report Card”
https://reportcard.msde.maryland.gov/Graphs/#/Assessments/NAEPResults/2MA/8/99/XXXX.
13 Op. cit., Maryland Commission on Innovation & Excellence in Education.
12

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 PIAAC survey strongly suggests that proficiencies at that level would well prepare students for the
postsecondary education and opportunities that are characteristic of a highly functioning economy.
Conversely, PIAAC survey results indicate that current outcomes for Maryland public-school
students will hamper their ability to function in today’s economy. This inability will also be a likely
drag on the state’s economy and continue or increase the need for Maryland to import human
capital to meet the needs of the state’s economy. While there is of course nothing wrong with
welcoming outsiders, the ability to recruit from elsewhere does not absolve Maryland (and its 24
school districts) from the responsibility of teaching and training its own citizens.
Research also indicates that there is a compounding effect at both ends of the proficiency spectrum.
High-performing, highly skilled individuals tend to work hard to assure that their offspring also
acquire high skills and the human capital needed to thrive in the 21st century. Alternatively, those
with low skills are often unable to enhance the human capital of their offspring (though there are
noteworthy exceptions). One consequence of these compounding tendencies is increasing inequality
over the course of generations.14

14

Op. cit. Sands, Anita and Madeline Goodman.

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 III. The Current Status of Outcomes for Maryland Public-school Students
To understand the potential impacts of Commission recommendations, it is important to
understand the current status of public-school students in Maryland and the economic and social
implications of the status quo. The following discussion examines educational outcomes for a group
of students who entered public high school in Maryland in 2010.

➢ Educational Outcomes for Students Entering High School In 2010
The starting point for looking at the economic and social implications of Maryland public-school
students is reviewing educational outcomes. The cohort of students entering high school in 2010
would typically have completed high school in 2014. Upon graduation, some portion of these
students would continue on to college where they may or may not earn a degree.
As illustrated in Exhibit 4, 87 percent of students entering high school in 2010 proceeded to
graduate from high school in 2014, while 13 percent did not earn a high school diploma in 2014.
Along with a high school diploma, 9 percent of this cohort of students earned a vocational
certificate in 2014.
Among those who graduated from high school, a majority chose to enroll in college. Those entering
college constituted 65 percent of the cohort of students entering high school in 2010.15
The Kirwan Commission determined that fewer than 40 percent of current Maryland public-school
students were proficient in English and math when they graduated from high school. By these
measures, fewer than 40 percent of these students were well prepared for success in college or
careers, which among other things translates into the need for remedial instruction in college and an
elevated tendency to leave college prior to graduation.
Exhibit 4. Initial Outcomes for Students Entering High School in 2010

Outcomes
Did not earn HS diploma, 2014
Earned HS diploma, 2014
Earned vocational certificate, 2014
Did not enter college
Entered college

Share of all incoming students
13.0%
87.0%
9.0%
35.0%
65.0%

Source. Maryland Department of Education

The source of data on outcomes for the cohort of students entering Maryland public high schools in 2010 is the
Maryland Department of Education as reported in National Center on Education and the Economy, “How Does
Maryland Stack Up?” January 2018.
15

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 For those moving on to college, undergraduate education would require nominally 2 to 4 more years
(often more than that, depending on whether students chose two-year or four-year colleges and
upon myriad other factors). Exhibit 5 lists the college choices of the roughly 65 percent of the
students entering high school in 2010 who went on to pursue post-secondary education. Roughly
23 percent of the students who began high school in 2010 chose two-year colleges, the vast majority
being public colleges. Another 17 percent of those starting high school in 2010 chose four-year
colleges in Maryland, again mostly public colleges. Almost one in four students starting high school
in 2010 selected a college outside of Maryland.
The exhibit also lists graduation rates after either three years for those at two-year colleges or six
years for those at four-year colleges. The highest graduation rates were for those students who
chose four-year private colleges in Maryland. This group is associated with a graduation rate
exceeding 73 percent.
The lowest graduation rates were for students enrolling in two-year public colleges, who graduated
at a rate of not quite 15 percent. Overall, only 45 percent of students entering high school in 2010
who entered college were able to complete 2- or 4-year college programs in a timely manner. This is
nothing short of an indictment regarding the quality of Maryland public education today.
Exhibit 5. College Pathways and Outcomes
College choices

2-year public college in Maryland
2-year private college in Maryland
4-year public college in Maryland
4-year private college in Maryland
College out of Maryland
Totals for those enrolled in college

Share of all 2010 incoming
students

Graduated in 3 to 6 years:
Share of students enrolled at
these colleges

22.0%
1.0%
12.0%
5.0%
24.0%
65.0%

14.5%
61.3%
60.8%
73.3%
59.0%
45.2%

Source. Maryland Department of Education. Note. Totals may not add due to rounding.

The ultimate educational attainment for Maryland public-school students entering high school in
2010 is summarized in Exhibit 6. As indicated, 13 percent did not earn a high school diploma while
22 percent earned a high school diploma but ended their schooling at that point. Roughly 36
percent enrolled in college but did not earn a degree. Not quite 4 percent earned an Associate
degree (i.e. a degree from a two-year college). Roughly one in four Maryland students entering high
school in 2010 earned a Bachelor’s degree. This conclusion rests on the presumption that all
colleges located out of Maryland that Marylanders attended were four-year colleges.

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24

 Exhibit 6. Ultimate Educational Attainment for Cohort of Students Entering High School in 2010

Ultimate level of educational attainment
Did not earn HS diploma
Earned HS diploma
Earned vocational certificate
Some college, no degree
Associate degree (2-year college)
Bachelor’s degree or higher
Total

Share of all 2010 incoming students
13.0%
22.0%
9.0%
36.1%
3.8%
25.1%
100.0%

Source. Maryland Department of Education

Many of these four-year college graduates can be expected to go on to earn an advanced degree at
the Master’s or Doctoral level or a degree from a professional school such as law or medicine.
Nationally, about 37 percent of those with a Bachelor’s degree go on to earn advanced degrees.
Applying this ratio to Maryland public-school students produces an estimated 9.3 percent of
students entering high school in 2010 who will ultimately earn an advanced degree.
Exhibit 7. Graduation Rates and Proficiency by Maryland School District
Jurisdiction
Maryland
Allegany County
Anne Arundel County
Baltimore City
Baltimore County
Calvert County
Caroline County
Carroll County
Cecil County
Charles County
Dorchester County
Frederick County
Garrett County
Harford County
Howard County
Kent County
Montgomery County
Prince George's County
Queen Anne's County
Saint Mary's County
Somerset County
Talbot County
Washington County
Wicomico County
Worcester County

Enrollment,
2018
893,289
8,629
82,777
80,591
113,282
15,908
5,787
25,290
15,364
26,891
4,767
42,140
3,811
37,780
56,784
1,993
161,546
132,322
7,778
18,053
2,918
4,646
22,595
14,953
6,684

High school graduation rate
2018
87.1%
90.4%
89.2%
72.2%
89.2%
93.9%
88.7%
96.0%
91.3%
93.5%
81.7%
92.5%
89.9%
89.2%
92.0%
93.5%
88.4%
78.5%
96.3%
94.5%
84.5%
94.2%
93.1%
83.2%
92.5%

2017
87.7%
90.9%
88.5%
70.7%
89.0%
94.6%
82.3%
95.0%
90.5%
94.7%
83.2%
92.5%
92.4%
88.9%
92.3%
90.5%
89.5%
82.7%
95.0%
93.9%
86.0%
87.1%
92.2%
83.8%
91.8%

2016
87.6%
88.7%
89.1%
70.7%
89.2%
94.5%
89.0%
95.0%
90.7%
92.2%
86.5%
92.1%
91.6%
89.1%
93.2%
88.6%
89.8%
81.4%
95.0%
93.7%
82.6%
85.5%
91.1%
81.5%
91.7%

2015
87.0%
90.2%
88.0%
69.5%
87.8%
94.2%
88.7%
95.0%
87.8%
92.4%
86.2%
93.5%
93.5%
89.9%
93.5%
90.8%
89.4%
78.8%
94.9%
94.3%
88.0%
93.3%
91.2%
83.5%
93.1%

Proficient (PL 4 & 5)
Performance Level
English 10 Algebra I
2018
2018
42.4%
31.2%
36.8%
29.8%
49.9%
45.5%
33.6%
8.8%
33.7%
17.0%
65.5%
53.8%
46.0%
33.3%
64.7%
57.8%
49.3%
33.4%
34.6%
34.8%
24.4%
17.8%
61.6%
54.4%
43.1%
31.7%
50.4%
38.7%
60.9%
57.0%
37.5%
17.7%
56.2%
40.6%
24.8%
11.9%
61.5%
50.1%
51.1%
45.2%
35.0%
21.0%
52.4%
29.0%
46.6%
37.9%
36.9%
23.8%
57.6%
46.9%

Source. Maryland Department of Education

An Economic Assessment of Kirwan Commission Recommendations

25

 Student outcomes in Maryland’s public-schools vary across the state. Exhibit 7 supplies enrollment
data and high school graduation rates in recent years for each city/county-level school district in
Maryland. In 2018, high school graduation rates ranged from 72 percent in Baltimore City to 96
percent in Carroll and Queen Anne’s counties.16
An important measure regarding the effectiveness of Maryland public-schools is proficiency in
English and math, which can indicate readiness for either college or a gainful career. The exhibit
also lists the proficiency performance levels of high school students in English 10 and Algebra I. As
with high school graduation rates, proficiency results vary considerably across Maryland’s 24 school
districts.
By school district, English 10 proficiency ranges from 24.4 percent to 65.5 percent; Algebra I
proficiency ranges from 8.8 percent to 57.8 percent. These proficiencies are for individual students
and reflect massive performance gaps across systems in a geographically compact state.17 Over time,
these massive gaps in proficiency will naturally tend to translate into massive disparities in
prosperity.

➢ Earnings Associated with these Educational Outcomes
In an increasingly knowledge-based economy, education is viewed as a pathway to better jobs and
greater income. This is nothing new, but there are continuous flows of data and analysis that render
it abundantly clear that the connection between human capital formation and economic well-being is
becoming stronger over time. The correlation between higher educational attainment and higher
earnings is well documented by the U.S. Bureau of the Census and the Bureau of Labor and
Statistics among others. But these are hardly the only available sources.
The Federal Reserve Board of Richmond produced a special report that tracked earnings and
educational attainment in Maryland over a period of decades.18 The report calculates median
earnings by educational attainment and also supplies unemployment rates and labor force
participation rates by educational attainment.
Exhibit 8 presents Federal Reserve Board of Richmond data regarding educational attainment,
earnings, and labor force participation in Maryland in 2017. As indicated, earnings increase with
greater educational attainment. Those who do not complete high school were associated with a

Maryland Department of Education, “Maryland Report Card”.
Private communication, Rachel Hilse to Sage Policy Group, October 17, 2019.
18 Federal Reserve Board of Richmond, “Educational Attainment in Maryland, 2017”. https://www.richmondfed.org//media/richmondfedorg/research/regional_economy/reports/special_reports/pdf/educational_attainment_md.pdf.
16
17

An Economic Assessment of Kirwan Commission Recommendations

26

 median income of a bit more than $26,000 in 2017, while those with a high school diploma or its
equivalent earned an additional $9,000.
Those with some college experience, but without a degree earned almost $43,000 (or $17,000 above
non-high school graduates), while those who achieved a Bachelor’s degree earned more than $61,000
that year. Those who went on to earn either graduate or professional degrees were associated with
median earnings in excess of $82,000.
Labor force participation also increases with educational attainment. To be a member of the labor
force, one must be working or actively looking for work. Among those with less than a high school
diploma, 64 percent participated in the labor force. This increases steadily with educational
attainment until those with college degrees were found to participate in the labor force nearly 90
percent of the time.
Predictably, as educational attainment increases, unemployment rates decrease. Those without a
high school diploma experienced unemployment rates in excess of 8 percent while those with
college degrees experienced unemployment rates of just greater than 2 percent.
Exhibit 8. Economic Characteristics and Educational Attainment, Maryland 2017
Less than a
High school
Some college
Educational
Bachelor's
high school
diploma or
or Associate
attainment
degree
diploma
equivalent
degree
Median earnings, 2017
$26,309
$35,409
$42,707
$61,640
Unemployment rate
8.6%
6.5%
4.4%
2.3%
Labor force
63.8%
76.0%
82.6%
89.6%
participation rate

Graduate or
professional
degree
$82,432
2.3%
89.6%

Source. U.S. Census Bureau

Median earnings represent the value which divides a population into two equal parts. However,
average earnings may be a more useful measure of earnings for large populations if there are sizeable
disparities between median and average earnings, which there often are given that a small fraction of
the population enjoys incredibly large incomes, which has more impact on average earnings than on
median earnings.
Nationally, the differences between median and average earnings by educational attainment can be
substantial particularly for those with four-year and advanced degrees. For example, average
earnings for those with a Bachelor’s degree are 12 percent higher than median earnings. (See
Appendix for details.)

An Economic Assessment of Kirwan Commission Recommendations

27

 Exhibit 9 supplies statistical detail regarding average earnings and tax payments. The more educated
a person, the more likely they are to produce higher tax payments. For instance, those with less than
a high school diploma paid an estimated $533 in State of Maryland income taxes in 2017. Those
with a graduate or professional degree paid nearly $4,200, or an amount roughly 8 times greater.
Exhibit 9. Economic Characteristics and Educational Attainment, Maryland 2017
Less than a
High school Some college
Educational
Bachelor's
high school
diploma or
or Associate
attainment
degree
diploma
equivalent
degree
Average earnings,
$25,796
$36,348
$42,098
$68,973
2017
($4,773)
($2,492)
($998)
$2,961
Income tax, federal
FICA
Federal taxes
Maryland state
income taxes
Maryland, other
state taxes
Maryland local
income taxes
Maryland local
property, other
taxes
Maryland state and
local taxes

Graduate or
professional
degree
$103,549
$7,130

$1,973

$2,781

$3,220

$5,276

$7,922

($2,800)

$289

$2,222

$8,237

$15,052

$533

$1,002

$1,275

$2,552

$4,194

$411

$773

$983

$1,968

$3,234

$370

$666

$838

$1,645

$2,682

$657

$1,184

$1,491

$2,924

$4,768

$1,971

$3,624

$4,587

$9,088

$14,878

Sources. Federal Reserve Bank of Richmond, eFile, Comptroller of Maryland, Sage

The relationship between educational attainment and contributions to public finances is even starker
at the federal level. Estimates of federal income tax and FICA are also listed in Exhibit 9.19
Because of federal tax credits for earned income and children, those with lower earnings pay
negative taxes. That is, these filers receive refunds when they file federal taxes. FICA represents the
Social Security and Medicare taxes paid at a rate of 7.65 percent by employees.
As is well known, Maryland State and local individual income taxes represent principal sources of
revenue for state and local government. Because Maryland’s state individual income tax represents a
little over half of all State general fund revenues, a reasonable estimate can be made of other state

Taxes are estimated using several methods. Estimates presume that taxes are filed by a married couple with one child.
This filing status results in a relatively low tax obligation. For example, single filers with equivalent incomes would pay
substantially more Maryland local income and other taxes. Federal taxes would increase even more for single filers who
would not qualify for child tax credits. Federal income taxes were estimated using eFile’s online tax calculator for 2019.
FICA taxes were estimated at 7.65 percent of earnings. Maryland State and local income taxes were estimated using the
Comptroller of Maryland's tax calculator. Maryland State individual income tax accounts for 56 percent of State general
fund revenue for FY2019. Other Maryland estimated State tax revenues are prorated based on this figure.
19

An Economic Assessment of Kirwan Commission Recommendations

28

 taxes that correlate with this individual income tax including sales and use taxes, corporate income
tax, and other taxes and fees.
For local government, income tax represents a significant source of revenue, but not as important as
property tax. These two taxes collectively account for approximately 90 percent of local
governments’ general fund revenues in Maryland, with income tax representing 36 percent of this
total and property tax representing 54 percent. Other taxes and fees contribute 10 percent of
general funds for local government. An estimate of total local property tax revenue generated by the
earnings shown in Exhibit 5 is based on estimated local income tax.
While educational attainment stops at a point in time, the impacts of educational attainment
continue for a lifetime. Therefore, it is useful to examine long-term economic and fiscal impacts.
Each cohort of public-school students represents a population that will generate earnings over the
course of their working lives. These lifetime earnings can be estimated by considering the likely
earnings of each former public-school student, the likelihood that they will participate in the labor
force and be employed, and the likely number of years they will work. Using average earnings from
2017 adjusted by both labor force participation rates and unemployment rates, Sage has estimated
the net present value of the lifetime earnings of individuals.20
As shown in Exhibit 10, estimates of lifetime earnings vary substantially by level of educational
attainment. Those not completing high school have lifetime earnings valued at $447,000, while
those who hold graduate or professional degrees have lifetime earnings estimated at $2.4 million.
As indicated, each step up the ladder of educational attainment creates a significant increase in value
relative to those not completing high school. Similarly, each step in that ladder of educational
attainment generates an increase in the estimated value of lifetime earnings. These earnings increase
with educational attainment despite the fact that the achievement of greater education generally
results in fewer years in the labor force. For example, it is assumed that those who have graduate or
professional degrees spend seven years in postsecondary education whereas those who do not earn a
high school diploma are assumed to enter the labor force when they are 18 years of age.
The literature indicates that these individual or private earnings are also associated with a broader
economic productivity spillover effect. Specifically, research indicates that as a population becomes
more educated, the business community is more likely to invest in the local economy and workers
are increasingly able to learn from one another. Both effects further human capital development

Net present value represents an estimate of the value in today’s dollars of a future stream of income. See Appendices
for discussion of discount rate, wage inflation, years in work life, and other details.
20

An Economic Assessment of Kirwan Commission Recommendations

29

 and support a more vibrant and productive economy. Thus, as a community’s educational
attainment increases, so do community-wide wages.
A low-end estimate of the value of this economic spillover effect is 37 percent of the earnings of
individuals.21 Exhibit 10 also details the social and productivity gain associated with listed earnings.
This productivity gain represents the sum of the lifetime earnings and the 37 percent spillover effect.
The increased value of this productivity gain over a lifetime of an individual with a college degree or
a graduate or professional degree is $1.7 million to $2.7 million greater, respectively, than that of an
individual failing to complete high school.
Exhibit 10. Lifetime Earnings and Productivity Impacts (Net Present Values in Thousands)
Less than a High school Some college or
Educational
Bachelor's
high school
diploma or
Associate
attainment
degree
diploma
equivalent
degree

Lifetime earnings
Increase from high school
dropout
Social and productivity
gain
Increase from high school
dropout

$447

$612

Graduate or
professional
degree

$757

$949

$1,676

$2,402

$311

$503

$1,229

$1,955

$1,038

$1,300

$2,296

$3,290

$426

$688

$1,684

$2,678

Sources. Federal Reserve Bank of Richmond, Levin, et al, Sage

In similar fashion, the lifetime tax payments of individuals can be estimated from their lifetime
earnings. Exhibit 11 supplies the net present value of these tax payments for each level of
educational attainment. The difference in State and local tax payments from those who fail to earn a
high school diploma to those individuals with a graduate/professional degree is in the range of
$310,000 over a lifetime.
Exhibit 11. Lifetime tax Payments, Federal, State & Local (Net Present Values in Thousands)
Less than a
High school
Some college
Educational
Bachelor's
high school
diploma or
or Associate
attainment
degree
diploma
equivalent
degree

Maryland state and
local taxes
Increase from high
school dropout
Federal income tax
Increase from high
school dropout

$34

($83)

Graduate or
professional
degree

$76

$103

$221

$345

$41

$69

$187

$311

($52)

($23)

$72

$165

$31

$60

$155

$248

Source. Sage

21

Op. cit., Belfield

An Economic Assessment of Kirwan Commission Recommendations

30

 ➢ Social Impacts Associated with Educational Attainment
Not only are there positive public revenue implications associated with higher educational
attainment, there are also large-scale cost savings. As educational attainment and earnings increase,
the need for certain types of public assistance decreases. Significant sources of public assistance
include Medicaid, food stamps (also known as SNAP), and welfare (including TANF).22 These types
of public assistance are provided to those in economic need.
Economic need can vary over time as individuals struggle with unemployment and other suboptimal economic outcomes. It is also influenced by general economic conditions. For example,
during the Great Recession, the need for public assistance and government support rose significantly
as more individuals lost work and earnings plummeted. Although general economic conditions can
increase or decrease overall demands for public assistance, educational attainment consistently
correlates (inversely) with the demand for public services and supports.
Exhibit 12 provides illustrative information regarding various types of public assistance in Maryland
and how they are affected by varying degrees of educational attainment. Public assistance is
fundamentally designed to address problems related to poverty. As indicated in the exhibit, people
living below the poverty line can be associated with any conceivable level of educational
achievement. However, educational attainment is clearly inversely correlated with poverty.
According to the U.S. Census Bureau, almost one in four of those with less than a high school
education lives below the poverty line. For those with a high school diploma or its equivalent, this
rate is effectively cut in half to 12.7 percent. For those who have attended college and especially for
those who have earned a college degree, the rate of poverty is lower still.
Similarly, those with lower levels of education are more likely to receive public assistance in the form
of Medicaid, food stamps, and welfare payments. As indicated by Exhibit 8, 38 percent of
Marylanders with less than a high school diploma are estimated to be covered by Medicaid while
only 3 percent of those with an advanced degree are covered by Medicaid.
A similar pattern is apparent for food stamps, with 34 percent of those with less than a high school
diploma receiving food stamp benefits and 4 percent of those with an advanced degree receiving
such benefits. The share of households receiving public welfare is much lower, but the pattern

SNAP is an acronym for the Supplemental Nutrition Assistance Program. TANF is an acronym for Temporary
Assistance for Needy Families.
22

An Economic Assessment of Kirwan Commission Recommendations

31

 holds with 4 percent of those with less than a high school diploma receiving TANF benefits while
no more than 1 percent of those with a college degree receive these benefits.
Using percentages of persons receiving public assistance by educational attainment, an estimate of
the average annual benefit for each person in Maryland with that level of education can be
computed. Exhibit 12 lists the average benefit for Medicaid, food stamps, and welfare for recipients
based on educational attainment. The value of these benefits applies to all Maryland adults in each
category of educational attainment, though of course not all adults receive social assistance. Thus,
the average Maryland adult who did not finish high school receives $2,627 in Medicaid assistance,
$547 in food stamp assistance, $325 in welfare payments, and $369 in housing and energy assistance.
Exhibit 12. Educational Attainment and Public Assistance, Maryland
Less than a
High school
Some college
Educational
Bachelor's
high school
diploma or
or Associate
attainment
degree
diploma
equivalent
degree
Persons below poverty
25%
13%
9%
5%
Health insurance
Covered by private
42%
61%
70%
82%
health insurance
Covered by Medicaid
29%
17%
14%
6%
Share of all persons receiving public assistance
Medicaid
38%
26%
18%
5%
Food st11mps (SNAP)
34%
26%
18%
6%
Public Assistance
4%
3%
2%
1%
(including TANF)
Housing and energy
34%
26%
18%
6%
assistance
Average annual benefit per person/household receiving assistance
Medicaid
$2,627
$2,009
$1,428
$464
Food stamps (SNAP)
$547
$374
$252
$72
Public Assistance
$325
$244
$162
$81
(including TANF)
Housing and energy
$142
$369
$115
$29
assistance

Graduate or
professional
degree
5%
82%
6%
3%
4%
0%
4%
$309
$43
$0

$22

Sources. Current Population Survey, American Community Survey, Center on Budget and Policy Priorities, Sage

Given the value of annual public assistance benefits, the lifetime costs of public assistance can be
estimated. Exhibit 13 presents these estimates of the lifetime value of public assistance for
Medicaid, food stamps, and welfare by level of educational attainment. These values are calculated
in the same fashion as the lifetime values of earnings and tax payments shown in exhibits 10 and 11,
respectively. As indicated, the value of the average total lifetime benefit for a Maryland adult with
less than a high school diploma is more than $60,000, while the analogous benefit for a college
graduate is $15,000 and $8,000 for the holder of an advanced degree.
An Economic Assessment of Kirwan Commission Recommendations

32

 Exhibit 13. Educational Attainment and Lifetime Costs of Public Assistance, Maryland
Less than a High school Some college
Bachelor’s
Educational attainment
high school diploma or or Associate
degree
diploma
equivalent
degree
Medicaid, average lifetime
$45,486
$41,857
$32,197
$11,273
benefit per person
Food stamps (SNAP), lifetime
$9,471
$7,792
$5,682
$1,749
annual benefit per person
Public Assistance (incl.
TANF), average lifetime
$5,627
$5,084
$3,653
$1,968
benefit per household
Housing and energy assistance
$6,389
$2,396
$3,202
$705
Total lifetime benefit
$66,973
$57,130
$44,733
$15,695

Graduate or
professional
degree
$7,167
$997
$0
$510
$8,674

Sources. Current Population Survey, American Community Survey, Center on Budget and Policy Priorities, Sage

•

Law & Order

The socioeconomic consequences of educational attainment hardly end there. Prisons in Maryland
and throughout the United States are disproportionately full of individuals who fail to earn a high
school diploma.
In 2011, the Maryland General Assembly created a task force to study the relationship between high
school dropouts and persons in Maryland’s criminal justice system. The associated 2012 report
indicated that an estimated 43 percent of Maryland state prisoners 25 years old and younger had
failed to complete high school while another 17 percent had completed high school but had no
additional educational attainment. Almost 18 percent of those state prisoners left school and were
transferred to another institution. Often this transfer was to supervision by the Department of
Juvenile Services.
The task force assumed that many of the former students involved in these transfer cases never
return to school. As a result, the task force estimated that more than 57 percent of state prisoners
25 years and younger were high school dropouts.23
The costs of the criminal justice system related to these high school dropouts are substantial. The
task force estimated that, in 2011, $427 million was spent to incarcerate 12,000 adult dropouts in
state prisons based on an annual cost in 2011 of $34,842 to incarcerate a prisoner for one year. The
task force also found that nearly 43 percent of high school dropouts entered the Maryland juvenile
justice system.
Using task force data regarding the proportion of state prisoners who either fail to complete high
school or only have a high school diploma, an estimate of the educational attainment of Maryland’s

Task Force to Study High School Dropout Rates of Persons in the Criminal Justice System, “School dropouts and
their impact on the criminal justice system,” December 2012.
23

An Economic Assessment of Kirwan Commission Recommendations

33

 current adult prison population can be generated. These high school dropouts and those whose
education stopped with a high school diploma constitute nearly three out of four state prisoners.
Based on other literature, it is estimated that 19 percent of these adult prisoners attended college but
did not earn a degree and that a bit more than 6 percent of adult prisoners have a college degree.24
In FY2018, the Maryland Department of Corrections reported 18,635 prisoners in state prisons with
almost 90 percent of these prisoners aged 25 or older. The Department of Corrections budget
during that fiscal year for operating costs, capital construction, and facilities management related to
state prisons totaled approximately $870 million or $46,735 per prisoner. The Department of
Corrections also reported that the average prisoner spent 82 months in prison. Within three years of
being released, an average of 40.5 percent of state prisoners returned to prison.
These data/parameters pave the way for an estimate of the number of prisoners at each level of
educational attainment as well as the percentage of the overall Maryland adult population that these
prisoners represent. For example, Maryland’s population 25 years and older with less than a high
school diploma is estimated at 417,716 persons for the relevant period of analysis. The 9,492 adult
state prisoners who fail to finish high school represent 2.3 percent of Maryland’s adult population
failing to complete high school.
Similarly, 0.3 percent of the Maryland adult population with a high school diploma or its equivalent
are estimated to be incarcerated in state prisons. For those with some college experience, but no
degree, an estimated 0.4 percent of the total Maryland adult population is incarcerated, while 0.1
percent of the Maryland adult population who hold a college degree are estimated to be incarcerated.
These percentages of the total Maryland adult population who are incarcerated in state prisons allow
for an estimate of the lifetime incarceration costs for the average Maryland adult by educational
attainment. These lifetime costs are based on the estimate that the typical Maryland prisoner spends
seven years in prison at an annual cost in 2018 of $46,735.
The estimate also incorporates a presumption that once released the former prisoner receives
community supervision (i.e. parole) for one year at a cost of $3,126. Given a recidivism rate of 40.5
percent, it is assumed that that proportion of adult prisoners returned to prison for another 7 years
followed by another year of community supervision. The current total value of this stream of future
incarceration and community supervision costs is estimated at more than $386,000/prisoner.
The costs of incarceration represent only a subset of the costs of crime. The greatest social burden
of crime is felt to be that borne by the victims of crime in terms of their reduced quality of life, any
losses of income (e.g., from being unable to work), and monetary losses associated with the crimes.

24

See Appendices for more detail on incarceration rates by educational attainment.

An Economic Assessment of Kirwan Commission Recommendations

34

 In addition, the general population incurs costs trying to avoid being victimized by crime. The
literature and research indicate that this social burden of crime is valued minimally at 2.5 times the
direct cost of crime.25
Exhibit 14 summarizes lifetime costs of incarceration and the social burden associated with that cost
by level of educational attainment. Costs are allocated on a per Maryland adult basis.
For example, 2.3 percent of Maryland adults without a high school diploma are estimated to be
incarcerated in state prisons. Thus, for all Maryland adults without a high school diploma the
average incarceration cost is 2.3 percent of the estimated lifetime incarceration cost measured in net
present value for one prisoner (2.3% of $386,000) or $8,774. The related social burden of this cost
is almost $22,000 and the total cost of incarceration including this burden is in excess of $30,000.
These average lifetime costs for Maryland adults fall dramatically as educational attainment increases
to roughly $700 for those with a high school diploma, to $16 for those who attended college but did
not earn a degree, and to $0 for those who earned a college degree. The notion is that these costs
can be substantially reduced through improved educational outcomes.
Exhibit 14. Educational Attainment and Lifetime Costs of Incarceration, Maryland

No HS
diploma
57.2%

HS grad,
only
17.2%

Some college,
no degree
19.0%

College
degree
6.6%

9,492

2,854

3,153

1,095

2.3%

0.3%

0.4%

0.1%

$8,774

$199

$5

$0

Social burden of crime

$21,935

$498

$11

$0

Total costs of incarceration

$30,709

$698

$16

$0

Characteristic

Share of prison population
No. of prisoners 25 and older
Prisoners as share of population 25 and
older
Prorated lifetime incarceration cost per
adult 25 and older in Maryland population

Source: Sage

While incarceration in state prisons is a significant expense, it is not the only source of public costs
for criminal justice and public safety. Expenses also include policing, local jails, courts, and juvenile
justice. Increasing educational attainment would almost certainly lead to reductions in these costs as
well as costs to operate state prisons.
Determining a clear relationship between better education and reduced costs of these criminal
justice and public safety activities, however, is complicated and beyond the scope of this analysis.
Thus, the estimates of lower criminal justice costs defined as lower state prison operating and
maintenance costs should be considered a conservative estimate of these impacts. That is, a better

25

Op. cit., Belfield.

An Economic Assessment of Kirwan Commission Recommendations

35

 educated population would result in greater savings in criminal justice and public safety spending
than is estimated here.

➢ Economic, Fiscal, & Social Implications of Educational Attainment
Assessments of earnings, tax payments, and social costs of individuals with varying degrees of
educational attainment discussed above can be summarized for expected cohorts of Maryland
public-school students. Exhibit 15 presumes that current cohorts of students in each high school
grade in Maryland total about 69,000 students. Given the ultimate educational attainment of current
Maryland public-school students shown above in Exhibit 3, the number of students at each level of
attainment can be estimated. These estimates range from almost 9,000 students who failed to
complete high school to more than 17,000 who earn a college degree.
As noted above, a significant share of those who earn a Bachelor’s degree go on to earn an advanced
degree. Consequently, it is estimated that in current cohort of Maryland public-school students, 15.8
percent will earn a Bachelor’s degree and 9.3 percent will earn an advanced degree.
The exhibit lists the lifetime earnings and tax payments as well as the estimated lifetime value of
public assistance and incarceration for each level of educational attainment. From a fiscal
perspective, lifetime public assistance costs are deducted from lifetime Maryland State and local tax
payments to estimate the excess of tax payments over public assistance payments.
As indicated, for those lacking a high school degree, there is no excess State and local tax payment.
In fact, for the least educated Marylanders, estimated lifetime tax payments will not cover the
estimated lifetime public assistance costs they generate.
Exhibit 15. Economic and Fiscal Impacts and Social Costs of Current Student Outcomes (Millions $2017)
Educational attainment
No. of students by outcome
(Share)
Lifetime earnings w/ social gain
Lifetime federal income tax
Lifetime Maryland state and local tax
Medicaid, average lifetime benefit per
person
Food stamps (SNAP), average lifetime
benefit per person
Public Assistance (incl. TANF),
average lifetime benefit per household
Housing and energy assistance, average
lifetime benefit per person
Incarceration costs and crime burdens
Maryland taxes less assistance
Source: Sage

Less than a
Some college
High school
high school
or Associate
or equivalent
diploma
degree
8,970
15,180
27,531
(13.0%)
(22.0%)
(39.9%)
$5,489
$15,750
$35,801
($741)
($788)
($619)
$306
$1,146
$2,847

Bachelor's
degree
10,902
(15.8%)
$25,028
$784
$2,407

Graduate or
Professional
Total
degree
6,417
69,000
(9.3%)
(100.0%)
$21,113
$103,181
$1,061
($304)
$2,214
$8,921

$408

$635

$886

$123

$46

$2,099

$85

$118

$156

$19

$6

$385

$50

$77

$101

$21

$0

$250

$57

$36

$88

$8

$3

$193

$275

$11

$0

$0

$0

$286

($570)

$268

$1,615

$2,236

$2,159

$5,708

An Economic Assessment of Kirwan Commission Recommendations

36

 IV. Evidence Based Research on Public-school Interventions
•

Yes, Educational Outcomes Can Be Improved Through Targeted Investment

The Commission relied on the experience of top performing school systems around the world to
determine recommendations for Maryland public-schools. These highly effective systems often
perform at the top of the list for international comparisons of student abilities. Countries such as
Finland and Singapore achieve the highest scores on the PIAAC assessments discussed above.
The Commission’s recommendations also take a systemic approach to improving the outcomes for
Maryland public-school students. Research regarding such systemic approaches is limited although
the results achieved by top performing systems internationally are clearly better than those achieved
by U.S. schools. Maryland public-school results are roughly equivalent to those of the average U.S.
school system.
As noted in the gap analysis described above, the success of top performing school systems is
attributable to a wide range of factors that begin well before children enter school. For example,
services that support new mothers and their infants and toddlers can improve the health status of
young children and help them be more successful in school. The Commission’s recommendations
for support of children and their families before beginning school (e.g., expanded Family Support
Centers and Judy Centers) acknowledges the significance of these types of programs.
The preponderance of Commission recommendations focuses upon reforms and interventions that
affect students once they are enrolled in school. There is a substantial body of research regarding
educational reforms and interventions that have improved the effectiveness of school systems and
increased the likelihood that students will be successful within those systems.
The Institute of Education Sciences, an element of the U.S. Department of Education, created the
What Works Clearinghouse (WWC) in 2002. The WWC is a repository of research that embodies
thousands of studies of educational reforms and interventions. Individual studies are evaluated in
terms of their ability to meet WWC standards for research integrity and the strength of evidence that
the study results and findings were effective. The discussion below highlights some, but certainly
not all, of this literature.26

Institute of Education Sciences, What Works Clearinghouse. https://ies.ed.gov/ncee/wwc/. Many of the studies
described here were also cited in the study of the Colorado school system by Belfield and Levin, 2011.
26

An Economic Assessment of Kirwan Commission Recommendations

37

 It should be noted that Commission recommendations embrace more of a systematic perspective on
interventions and reform. There are almost certainly synergies between and among various
Commission recommendations.
Available literature, however, tends to look at individual interventions and reforms. Consequently,
the discussion below tends to apply at best to some aspects of the Commission recommendations
but does not address a broad and comprehensive set of simultaneous interventions. Accordingly,
the intent of citing some of the research regarding educational interventions is to clarify that
considerable research has been conducted indicating that educational reforms and interventions can
produce tangible educational and economic value. There is some cynicism regarding the ability to
move student achievement forward. Research strongly suggests reason for hope.

➢ Toward a Higher High School Graduation Rate
Better, more effective teachers improve outcomes for high school students. Paying teachers more is
a well-researched method for improving teacher effectiveness by increasing the quality of those who
choose teaching as a career, reducing turnover (which is notoriously high for talented young
teachers), and creating motivations for teachers to continue in their careers. One state-level analysis
reported that a 10 percent increase in all teacher salaries from kindergarten through high school
resulted in an increase of five percentage points in the number of high school graduates.27
One of the largest effects on high school graduation rates has been observed in conjunction with
among the earliest of possible interventions. High quality preschools or pre-kindergartens have
been associated with not only increased high school graduation rates, but also reduced requirements
for special education. These programs have increased high school graduation rates by 11 percentage
points to 19 percentage points.28
The Perry Project has studied an innovative preschool program developed in the 1960s in Michigan.
The program was designed to serve preschool students who were at risk of failing in school. By
randomly assigning 123 students to a high-quality program and comparing them to a matched
control group receiving no preschool education, researchers were able to isolate the effects of the
preschool program on student careers. Students in the preschool program graduated from high
school at substantially higher rates than the control group (77 percent versus 60 percent). When
tested for IQ at age 5, 67 percent of the children in preschool had IQs of at least 90 while 28
percent of the students who did not participate in preschool scored this well.

27
28

Loeb and Page, 2000.
Temple and Reynolds, 2007; Nores et al, 2005.

An Economic Assessment of Kirwan Commission Recommendations

38

 Researchers followed these two groups for decades and found that students who attended preschool
had higher earnings at age 40 and were also less likely to be arrested by the time they were 40. These
preschool students also produced fewer teenage pregnancies and were more likely to own a home
and an automobile.29
The Child-Parent Center program in Chicago provides support for both preschool students and
their families. Started in 1967 to serve families in high-poverty areas not served by Head Start, the
program requires active participation of parents and works with students and their families until
third grade. Operated by Chicago Public-schools, the program now functions at 11 sites.
In comparison to a matched control group, children in the program earned more as adults and paid
more in taxes. They were less involved in the criminal justice system. As public-school students,
they were less likely to require special education services or to be retained in grade. Analyses of the
program have consistently found substantial returns on public spending for the program.30
The Abecedarian Project provides full-time, high-quality educational intervention for children from
infancy through age five. Individualized education plans focus on social, emotional, and cognitive
development with an emphasis on language. Researchers have studied participants into adulthood
with assessments beginning at age five and continuing into the mid-30s. Findings include higher
scores on math and reading tests, lower levels of grade retention, and fewer special education
placements. At age 30, participants were more likely to hold a bachelor’s degree, to have a job, and
to be associated with delayed parenthood.
Importantly, teenage mothers of Abecedarian Project participants were more likely to finish high
school, less likely to have additional children, to generate higher earnings, and to be associated with
less reliance on public assistance. These factors contributed to the finding that taxpayers saved
$2.50 for every $1.00 spent on the program. A 2014 follow-up study found participants enjoyed
better health than those who did not participate, including lower rates of hypertension, lower risk of
coronary heart disease, and lower rates of obesity.31
The Early College High School Initiative was created in 2002 to increase opportunities for
underserved students to earn post-secondary degrees or other credentials. Participating students are
exposed to college while still in high school and provided support. Participants have an opportunity
to earn an Associate degree or two years of college credits while still in high school. The program

High Scope, “Perry Preschool Project”. https://highscope.org/perry-preschool-project/.
Reynolds, et al. “Age 26 cost–benefit analysis of the child‐parent center early education program.” 2011.
31 FPG Child Development Institute of the University of North Carolina at Chapel Hill. “The Carolina Abecedarian
Project”. https://abc.fpg.unc.edu/abecedarian-project.
29
30

An Economic Assessment of Kirwan Commission Recommendations

39

 increased high school graduation rates five percentage points, from 81 percent to 86 percent. The
share of those earning college degrees rose from 4.7 percent to 24.9 percent.32
First Things First is a high school intervention that emphasizes small learning communities, longterm student teacher relationships, mentoring, teacher advocacy for individual students, and a
rigorous curriculum. Students participating in this program improved high school graduation rates
by 16 percentage points.33
Achievement for Latinos through Academic Success is a program that assigns counselors to
individual students. These counselors monitor student attendance, behavior, and academic progress.
Research indicates that the program reduced the likelihood of students dropping out of high school
and had the potential of increasing graduation rates by five percentage points.34
Twelve Together provides peer support and mentors for middle school and high school students. It
also offers weekly discussion groups after school. Researchers determined that eighth graders who
participated in this program were associated with reduced high school dropout rates of five
percentage points.35
Career Academies seek to improve employment readiness by creating work experiences for high
school students. These programs typically work as schools within schools. When targeted to at risk
students, they show a potential for increasing high school graduation rates by 11 percentage points.36
Check & Connect monitors and assesses student performance and provides mentors for at-risk
students. One assessment determined that the program could raise high school graduation rates by
17 percentage points.37
Talent Search provides academic support for students at more than 400 sites. Compared to students
who do not participate in the program, students in Talent Search graduated from high school at
rates nine percentage points higher.38

Berger, Andrea et al, “Early College, Early Success: Early College High School Initiative Impact Study.” American
institutes for research. 2013.
33 Levin et al, 2007.
34 Gandara et al, 1998.
35 Dynarski et al, 1998.
36 Kemple and Snipes, 2000.
37 Sinclair et al, 2005.
38 Constantine et al, 2006.
32

An Economic Assessment of Kirwan Commission Recommendations

40

 Success for All is a whole-school reform program focused on at risk students in grades kindergarten
through five. The program has demonstrated improved test scores for eighth graders, reductions in
the need for special education, and reductions in the rate of grade retention.39

➢ Measured Returns on Investment
The interventions in school reform cited above all require additional funding. Whether this
spending is justified can be answered in part by looking at the fiscal benefits versus costs for most of
these programs.
Exhibit 16 summarizes research on many of the programs cited above in terms of increased high
school graduation rates. A critical factor in determining the cost-effectiveness of these interventions
is the extent to which they are targeted to those students who are most in need of the services the
interventions supply. Fiscal benefit/cost ratios can range widely based on whether there is no effort
to target the intervention to those who need them or whether they are perfectly targeted.
Given the Commission’s focus on providing additional resources to at-risk students, the exhibit lists
the midpoint of these ranges for each intervention. The midpoint of the benefit/cost range for all
of these interventions is in excess of 1.
Exhibit 16. Educational Interventions and Their Benefits and Costs

Intervention
10% increase in teacher salaries (K-12)
Chicago Child-Parent Center Program
High Scope Perry Preschool Program
Expansion of Head Start
First Things First
Achievement for Latinos through Academic Success
Twelve Together
Career Academies
Check & Connect
I Have a Dream
Talent Search

Extra graduates
per 100 students
5
11
19
4
16
5
5
11
17
10
9

Midpoint of fiscal
benefit/cost estimates
8.0
10.1
5.2
6.3
13.3
22.9
18.1
21.2
16.0
4.1
79.3

Source. Belfield and Levin (2011).

39

Borman and Hewes, 2003.

An Economic Assessment of Kirwan Commission Recommendations

41

 ➢ A Maryland Example of Successful Intervention
Thread is a program that works with students in three Baltimore City schools: Paul Laurence High
School, The Academy for College and Career Exploration, and Frederick Douglass High School.
Using volunteers, Thread works with students who are typically in the bottom quartile on a range of
measures, both academic and socioeconomic.
Volunteers provide individualized support year-round including rides to schools, tutoring, and
buying groceries. The intention is to create strong interpersonal bonds between students and
volunteers assigned to work with him or her. Additional volunteers provide support in academic
advancement, college and career preparation, and opportunities for students to engage in
community service. Additional pro bono collaborators supply legal, health, and housing support,
employment opportunities, and other services.
Thread recruits students when they are in the 9th grade. Currently, students sign up for a 10-year
commitment with Thread. Thus, Thread engages with students for up to 6 years after they have
completed high school.
To date, Thread has worked with 527 students. Within 6 years of joining Thread, 85 percent of
students graduated from high school. Among students who have participated in the Thread
program for at least a decade, 83 percent have earned degrees or certificates from two-year or fouryear colleges.
Thread’s ability to achieve an 85 percent high school graduation rate for its students represents a
major achievement. This rate nearly equals the statewide high school graduation rate. The fact that
83 percent of Thread participants have earned degrees from two-year and four-year colleges
represents a stark and positive departure from statewide averages. As noted above, 29 percent of
Maryland students entering high school in 2010 have earned degrees from two-year or four-year
colleges.40

➢ Comprehensive Reform in Massachusetts
With the Massachusetts Education Reform Act of 1993, Massachusetts implemented a
comprehensive set of educational reforms that supplies a case study and statistical evidence
regarding the potential educational and economic impacts of far-reaching reform. Like the Kirwan

40

Thread. https://www.thread.org/.

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42

 Commission, these reforms were developed by an array of educational stakeholders: educators,
parents, and the business community.41
The business community was a key participant. Observers give credit to the Massachusetts Business
Alliance for Education (MBAE) for developing the blueprint for and proposing many of the policy
recommendations of the Reform Act. MBAE advocated for a budget that, among other things,
doubled funding for low-income districts. It also supported the requirement that tenth graders pass
Massachusetts Comprehensive Assessment System (MCAS) tests. The MBAE was motivated by a
concern that a failure to improve elementary and secondary education would erode “the foundations
of the future economic strength of the Commonwealth” and significantly deteriorate “the very
fabric of the democratic society of informed citizens.”
Major elements of the Reform Act include:
•
•

•
•

•

Statewide curriculum frameworks and learning standards. These standards were created to
guide teachers’ lesson planning and districts’ curriculum planning.
Comprehensive assessments. The MCAS, given to fourth, eighth, and tenth grade students,
was developed to align with the curriculum frameworks and to identify individual students
and school districts in need of additional attention.
Graduation standards and vocational pathways. All students must pass the MCAS to
graduate. Those who pass the test can achieve occupational proficiency certificates.
Additional resources for poorer school districts. State funding was significantly increased for
all districts; allocations were designed to rectify inequities between more affluent and less
affluent districts.
Increased learning time. School districts were required to demonstrate scheduling 900 hours
of learning time for elementary school students and 990 hours for secondary school
students.

The discussion of the Massachusetts Education Reform Act of 1993 is based on several sources, including Chieppo,
Charles and Jamie Gass, “How Massachusetts Showed the Way on Education Reform,” The American Conservative,
May 13, 2019 https://www.theamericanconservative.com/articles/how-massachusetts-showed-the-way-on-educationreform/; DiCara, Lawrence S., “Funding plus reform right equation for education legislation, State leaders should stay
true to successful 1993 approach,” Commonwealth Magazine, June 16, 2019
https://commonwealthmagazine.org/education/on-ed-funding-overhaul-stay-true-to-our-course/; Gabor, Andrea, “An
education reform law that worked,” Boston Globe, July 3, 2018
https://www.bostonglobe.com/opinion/2018/06/11/education-reform-law-thatworked/sDl5ewacbQvW5kZHqfpPzM/story.html; Worcester Education Collaborative, “A Primer on Education
Reform in the Commonwealth: Federal and State Policy”
https://static1.squarespace.com/static/58d54b22e58c628ea813be8e/t/599356b3d482e90ebb8e33f3/1502828212400/A
-Primer-on-Education-Reform-v1.0-final-9281.pdf
41

An Economic Assessment of Kirwan Commission Recommendations

43

 •

•

Improved teacher qualifications. Tests were developed to assure that new teachers had
communication and literacy skills and proficiency in their subject areas. Testing also applied
to current teachers.
Enhanced accountability. Increased funding was tied to a variety of accountability measures
designed to assure that additional resources resulted in better outcomes. Accountability
included oversight and monitoring of school district performance. For “under-performing”
districts, consequences encompass increased oversight, including receivership.

Impacts on student learning and outcomes were significant.
•

Beginning with 1993, when the reforms were first instituted, statewide SAT scores rose for
13 consecutive years.

•

A similar improvement was observed in scores on the National Assessment of Educational
Progress (NAEP), a national assessment of fourth and eighth grade students in math and
English. By 2005, Massachusetts became the first state to have both its fourth and eighth
grade students achieve the best scores in the nation in both subjects. This across-the-board
best in the nation result has been achieved in each year save one since 2005.
In 2007 and 2011, the results of Trends in International Mathematics and Science Study
(TIMSS) found that Massachusetts’ students were competitive with students in such highperforming countries as Japan, Korea, and Singapore. The 2007 TIMSS results in science
showed that Massachusetts eighth graders were tied for first place internationally.
Massachusetts was among the top three states in terms of reducing race- and class-based
achievement gaps between 1998 and 2005. Between 2002 and 2009, NAEP scores for
African-American and Hispanic fourth and eighth graders increased more rapidly than those
of white students.

•

•

•

Proficiency scores in English and mathematics increased substantially. In 1998, the share of
10th graders who were proficient in English was 38 percent while those proficient in
mathematics was 24 percent. A recent article reports that presently 91 percent of tenth
graders are proficient in English and 78 percent are proficient in mathematics.

Unlike many of the interventions and reforms described earlier, the Massachusetts experience
represents a comprehensive program instituting systemic reforms. For this reason, it parallels
Kirwan Commission recommendations far better than other examples cited in this Sage study.
Like Massachusetts, Kirwan Commission recommendations call for more highly qualified teachers,
curricular reforms that include vocational certificates, and more equitable funding through additional
resources for poorer districts in particular. One of the more important parallels may be the
emphasis on accountability to assure that additional resources actually generate superior outcomes.

An Economic Assessment of Kirwan Commission Recommendations

44

 V. Estimated Impacts of Commission Recommendations
The following table supplies an estimate of what would occur if Commission’s recommendations
were implemented with fidelity, oversight, and measurement. It is based on the assumption that if
the proportion of Maryland’s students who are proficient in English 10 and Algebra I doubles from
its current level, the share of students earning a Bachelor’s degree or an advanced degree would also
double. By the same token, the rate of dropouts and those stopping at a high school diploma would
be sliced in half.
Another important aspect of the projected change in student outcomes is the number of students
who will earn vocational certificates. These certificates would serve as credentials smoothing entry
into a number of high skilled, high earning career paths that do not typically require traditional fouryear college degrees. This represents an important element of the goal of having 80 percent of
Maryland students career and college ready by high school completion.
Proficiency in English and mathematics are central measures of high school students’ readiness for
college or a career. As noted above in Exhibit 7, proficiency scores in English 10 (42.4 percent) and
Algebra I (31.2 percent) of current Maryland high school students are well below the goals of the
Commission to have 80 percent of high school graduates ready for college or a career. This goal
would roughly double the share of Maryland high school graduates who are prepared to be
successful in post-secondary education and/or career paths.
Exhibit 17 indicates how a doubling of proficiency in basic skills and human capital could affect
educational attainment. The share of Maryland students earning bachelor’s or advanced degrees is
assumed to increase from 25 percent to 50 percent. Those earning a two-year degree, vocational
certificate, or having some college experience would decrease from 40 percent to 32 percent, but
would include a higher proportion of students who have earned either Associate degrees or
vocational certificates.
Given the Commission’s projection that 45 percent of future cohorts will enter apprenticeships or
earn other industry certified credentials, it is likely that many who stop their education at a high
school diploma as well as those who go on to college will be better prepared for success in the world
of work and will earn more than their counterparts operating under Maryland’s status quo. It is
assumed that the shares of those stopping at a high school diploma or failing to graduate high
school would be cut in half.

An Economic Assessment of Kirwan Commission Recommendations

45

 Exhibit 17. Comparison of Estimated Outcomes for Current Maryland Public-school Students and
Outcomes Resulting from Implementation of Commission Recommendations
Less than a High school Some college
Graduate or
Educational
Bachelor's
high school
diploma or
or Associate
Professional
attainment
degree
diploma
equivalent
degree
degree
Status quo for students entering high school in 2010
No. of students
8,970
15,180
27,531
10,902
6,417
by outcome
(Share)
(13.0%)
(22.0%)
(39.9%)
(15.8%)
(9.3%)
Potential impacts of Commission recommendations on future cohorts
No. of students
4,485
7,590
22,287
21,804
12,834
by outcome
(Share)
(6.5%)
(11.0%)
(32.3%)
(31.6%)
(18.6%)
Estimated change in student outcomes
Change in
educational
-4,485
-7,590
-5,244
10,902
6,417
attainment

Total

69,000
(100.0%)
69,000
(100.0%)
0

Source. Sage

Economic impacts of improved public-school outcomes would be substantial and comprehensive.
As discussed above, educational attainment positively correlates not only with income and lifetime
earnings, but also with the demands for public services and assistance. Educational attainment also
correlates with involvement (or lack thereof) in the criminal justice system.
Research also indicates that more effective education systems can have significant impacts on health
and health-related issues. At-risk students who are well served by schools, starting with preschools,
are healthier as adults and also exhibit reduced rates of teenage pregnancy.
The assessment of how current outcomes for Maryland public-school systems affect lifetime
earnings, tax payments, and demands for a few key public services was presented in Exhibit 11 in a
previous section of this report. This assessment represents a baseline against which impacts of the
Commission’s recommendations can be measured.
Exhibit 18 contains the same basic information as Exhibit 15, but substitutes the superior student
outcomes listed in Exhibit 17. Given that there are substantially more four-year college graduates
and those with advanced degrees in this cohort of future Maryland public-school students, benefits
in terms of income/earnings and tax payments are much higher.
The ability of students to earn vocational certificates also helps to bolster future incomes as a result
of implementing Commission recommendations. Unlike the earnings associated with typical
educational attainment used in this analysis, earnings of future Maryland students who earn
vocational certificates or complete apprenticeships because of implementation of Commission
recommendations are more difficult to estimate. Such earnings are likely to vary widely and include
An Economic Assessment of Kirwan Commission Recommendations

46

 some individuals whose wages and salaries would exceed the average wages for those with four-year
degrees.
A recent report listed 10 jobs that do not require a college degree, although most require some type
of industry certification, that earn between $80,000 and $95,000. For this analysis, the portion of
future high school graduates who do not go on to earn college degrees, but who earn vocational
certificates are assumed to earn 10 percent more than their counterparts among current Maryland
public-school students. This estimate is likely and intentionally conservative and underestimates
actual impact.
Because higher levels of education are inversely correlated to the need for many public services and
to criminal behavior, costs in terms of public assistance and incarceration are much lower. Exhibit
18 supplies estimates of the ultimate, steady state condition that would ensue if the Commission’s
recommendations were to be implemented faithfully and Commission estimates of educational
improvement prove correct.
Exhibit 18. New Steady-State in Maryland and Associated Estimates of Economic and Fiscal Impacts for
Future Cohorts of Entering High School Students (Millions $2017)
Less than a High school Some college
Graduate or
Bachelor's
Educational attainment
high school diploma or or Associate
Professional
Total
degree
diploma
equivalent
degree
degree
No. of students by outcome
(Share)
Lifetime earnings with social gain
Lifetime federal income tax
Lifetime Maryland state and local
tax
Medicaid, average lifetime
benefit per person
Food stamps (SNAP), avg.
lifetime benefit per person
Public Assistance (incl. TANF),
avg. lifetime benefit per
household
Housing and energy assistance,
average lifetime benefit per
person
Incarceration costs and crime
burdens
Maryland taxes less assistance
Source: Sage

4,485
(6.5%)
$2,744
($371)

7,590
(11.0%)
$8,347
($304)

22,287
(32.3%)
$30,690
($168)

21,804
(31.6%)
$50,057
$1,569

12,834
(18.6%)
$42,227
$2,122

69,000
(100.0%)
$134,065
$2,848

$153

$631

$2,514

$4,814

$4,428

$12,540

$204

$318

$718

$246

$92

$1,577

$42

$59

$127

$38

$13

$279

$25

$39

$81

$43

$0

$188

$29

$18

$71

$15

$7

$140

$138

$5

$0

$0

$0

$143

($285)

$192

$1,514

$4,472

$4,317

$10,212

It is useful to juxtapose Exhibit 18 findings against Exhibit 15 findings. Under the status quo, a
representative group of Maryland students arriving in high school could be expected to pay
approximately $8.9 billion in State and local taxes over a lifetime. With educational improvements in
hand, this same group could be expected to pay nearly $12.5 billion in State and local taxes.
An Economic Assessment of Kirwan Commission Recommendations

47

 Differences in outcomes are even starker when one considers analyzed forms of social assistance.
Today, the representative group would be associated with roughly $5.7 billion in Maryland State and
local tax payments in excess of social assistance receipts. If Commission recommendations are
implemented with fidelity and generated estimated outcomes, this same group would be associated
with $10.2 billion in total State and local taxes in excess of social assistance.

➢ Pre-Kindergarten and Working Parents
Another effect of implementing Commission recommendations will be relieving those who care for
three-year-old and four-year-old children of their childcare responsibilities during school hours.
Some of these caregivers may decide to seek employment once their children are enrolled in prekindergarten classes.
Publicly funded pre-kindergarten will also save some families the cost of childcare. The cost of
childcare in Maryland is substantial. Maryland is ranked seventh nationally among the 50 states. A
recent study reported the cost of childcare for infants at more than $15,000 annually and more than
$10,000 for four-year-olds. These costs can exceed in-state tuition for a four-year public college.42
Accordingly, the availability of publicly funded pre-kindergarten would provide a clear benefit for
some families whose children are now in childcare or in private pre-kindergarten programs by
reducing or eliminating costs of those programs. Data to determine the extent and value of these
savings are not available. To the extent that publicly funded pre-kindergarten would reduce current
family expenses, this analysis potentially underestimates the benefits of implementation of the
Commission recommendations.
The Bureau of Labor Statistics recently released statistics on families and their participation in the
labor force. A majority of parents presently participate in the labor force; both mothers and fathers.
Not surprisingly, those whose children are youngest participate at the lowest rates. Nonetheless,
almost three of five married mothers with children under three years of age participate in the labor
force, while for other mothers with children under three years of age, two of three are in the labor
force.
The great majority of working mothers are full-time workers. Labor force participation rates for
fathers are consistently higher than those from mothers. Fathers also are more likely to be full-time

CBS Baltimore, “Childcare In Maryland More Expensive Than In-State Tuition To 4-Year Public College, Report
Finds,” July 26, 2019. https://baltimore.cbslocal.com/2019/07/26/child-care-expenses-in-maryland/.
42

An Economic Assessment of Kirwan Commission Recommendations

48

 workers. Exhibit 19 lists labor force participation rates and unemployment rates and rates for fulltime work for parents of children of various ages.43
Exhibit 19. Employment Characteristics of Families, 2018
Employment Characteristics for Demographic
Labor force
Cohorts of Interest
participation
Women with children under 18 years
71.5%
Married mothers
69.0%
Mothers with other marital status (1)
76.7%
Mothers with children under 6 years
65.1%
Mothers with children 6 to 17 years
76.4%
Married mothers with children under 3 years
59.6%
Mothers, other marital status, w/ children under 3 years
67.2%
Fathers with children under 18 years
93.3%
Married fathers
94.1%
Fathers with other marital status (1)
88.4%
Employed fathers, regardless of children’ ages
Employed mothers
Employed mothers with children 6 to 17
Employed mothers with children under 6

Unemployment
rate

Full-time
work

2.5%
6.4%

2.6%
8.7%
1.9%
5.7%
96.0%
78.0%
80.0%
75.0%

Source. Bureau of Labor Statistics. Note. 1. Other marital status includes persons who are never married; widowed; divorced;
separated; and married, spouse absent; as well as persons in same-sex marriages.

The introduction of pre-kindergarten for three-year-old and four-year-old children will allow some
parents to enter or re-enter the labor force. With their young children in school, parents who would
otherwise be at home taking care of these children are free to work. This results in an expanded
labor force, higher household incomes, and larger tax receipts for federal, State and local
governments.
An assessment of universal free preschool in Washington, D.C. found that the availability of prekindergarten led to a significant increase in women with young children entering the labor force. In
September 2009, Washington, D.C. began to expand its publicly funded pre-kindergarten program.
By 2016, roughly 77 percent of all the 3-year-olds and 4-year-olds in the District were enrolled in
pre-kindergarten programs, including 90 percent of 4-year-olds and 70 percent of 3-year-olds. Since
the introduction of universal pre-kindergarten, the labor force participation rate for Washington’s
mothers (fewer data are available for fathers) has increased 12 percentage points.44

43

Bureau of Labor Statistics. “Employment Characteristics of Families – 2018,” April 18, 2019.
https://www.bls.gov/news.release/pdf/famee.pdf.
44 Malik, Rasheed, “The Effects of Universal Preschool in Washington, DC: Children's Learning and Mother’s Earnings,” September
2018. https://www.americanprogress.org/issues/early-childhood/reports/2018/09/26/458208/effects-universal-preschoolwashington-d-c/.

An Economic Assessment of Kirwan Commission Recommendations

49

 The Commission’s assessment of publicly funded pre-kindergarten in Maryland includes projections
of the number of students who would be enrolled in new programs. These projections are detailed
in Exhibit 20. Enrollment increases from roughly 18,000 during the first program year to more than
80,000 at full implementation. There is a major increase in enrollment in the fifth year of
implementation when four-year-olds from more affluent households begin to participate.
Exhibit 20. Projected Enrollment in Pre-kindergarten Programs
4-year olds
Program
year
Up to 300% FPL (1)
From 300% to 600% FPL
FY 2021
15,258
FY 2022
19,083
FY 2023
22,808
FY 2024
26,029
FY 2025
26,178
16,307
FY 2026
28,226
16,419
FY 2027
28,351
17,675
FY 2028
30,369
17,762
FY 2029
30,499
19,038
FY 2030
30,630
19,134

3-year olds
up to 300% FPL
2,981
5,953
8,938
11,966
15,049
18,172
21,290
24,431
27,598
30,794

Total
18,239
25,036
31,746
37,995
57,534
62,817
67,316
72,562
77,135
80,558

Source. Kirwan Commission. Note. 1. FPL is the Federal Poverty Level.

Given this substantial population of three-year-olds and four-year-olds who will be enrolled in
public-school, it is likely that many of their mothers will choose to enter the labor force. The
experience in Washington D.C. suggests that 12 percent of the mothers of these young children
would enter the labor force.
An alternative estimate can be derived from the labor force participation rate of mothers of children
in the K-12 school system (76.4 percent) versus the rate for mothers of children who are less than
three years old: 59.6 percent for married mothers and 67.2 percent for other mothers, generating a
weighted average of 62.0 percent. These rates are reflected in Exhibit 19 above and are consistent
with a roughly 14 percent increase in the share of mothers participating in the workforce.
These alternative parameters are used to estimate a range for the number of mothers who would
enter the workforce during the implementation of pre-kindergarten programs. As reflected in
Exhibit 21, the midpoint of this range indicates that more than 2,400 women would enter the
workforce in the first program year. By full implementation in the 10th year, Sage estimates that
more than 10,600 women would be in the workforce who would otherwise not be.

An Economic Assessment of Kirwan Commission Recommendations

50

 Exhibit 21. Projected Enrollment in Pre-kindergarten Programs
Mothers entering workforce
Program year
Total
Low-end
High-end
Midpoint
FY 2021
18,239
2,201
2,633
2,417
FY 2022
25,036
3,004
3,615
3,309
FY 2023
31,746
3,810
4,583
4,197
FY 2024
37,995
4,559
5,486
5,022
FY 2025
57,534
6,904
8,306
7,605
FY 2026
62,817
7,538
9,069
8,304
FY 2027
67,316
8,078
9,719
8,898
FY 2028
72,562
8,707
10,476
9,592
FY 2029
77,135
9,256
11,136
10,196
FY 2030
80,558
9,667
11,631
10,649
Source. Kirwan Commission, Rasheed Malik, Bureau of Labor Statistics

Given the workforce characteristics of parents cited above, the estimated unemployment rate for
these mothers of pre-kindergarten students would be 4.5 percent, the average rate for married
mothers and other mothers. Thus, on average, 95.5 percent of the mothers newly entering the
workforce would be employed.
According to available data, at least 75 percent of these employed mothers would be working fulltime. Factoring in unemployment rates and probabilities of full-time employment, during the first
program year of pre-kindergarten more than 1,700 mothers would have entered the workforce as
full-time workers, while nearly 600 mothers would be participating in the workforce as part-time
workers.
By the 10th year of implementing pre-kindergarten for three-year-olds and four-year-olds, 7,600
mothers would be participating in the workforce as full-time workers while in excess of 2,500
mothers would be part-time workers. From the first year to the 10th year of implementing prekindergarten, the number of mothers likely to enter the workforce either as full-time or part-time
workers would steadily increase. Exhibit 22 supplies summary statistical detail.
Exhibit 22. Pre-kindergarten Mothers Participating in the Labor Force
Employed mothers
Mothers entering
Program year
workforce
Total
Full-time
Part-time
FY 2021
2,417
2,308
1,731
577
FY 2022
3,309
3,160
2,370
790
FY 2023
4,197
4,008
3,006
1,002
FY 2024
5,022
4,796
3,597
1,199
FY 2025
7,605
7,263
5,447
1,816
FY 2026
8,304
7,930
5,947
1,982
FY 2027
8,898
8,498
6,373
2,124
FY 2028
9,592
9,160
6,870
2,290
FY 2029
10,196
9,737
7,303
2,434
FY 2030
10,649
10,170
7,627
2,542
Sources. Kirwan Commission, Bureau of Labor Statistics

An Economic Assessment of Kirwan Commission Recommendations

51

 In 2017, the median hourly wage in Maryland was $20.68.45 This is equivalent to an annual full-time
wage of just over $43,000. Assuming part-time work averaged 20 hours a week, part-time work
would generate an annual wage of more than $21,500. With 75 percent of employed mothers of
pre-kindergarten students working full-time, the average for all newly employed mothers of prekindergarten students would be approximately $37,600, assuming that these new workers earn the
median wage.
Evidence from Washington, D.C.’s experience with prekindergarten indicates that 40 percent of
those entering the labor force because of the new programs were college graduates while almost a
quarter had attended college without earning a degree.46 Given the earnings power of those with
four-year or advanced degrees or some college experience, the use of the median wage to estimate
the earnings of these mothers entering or re-entering the labor force is reasonable.
With these wage parameters in hand, total earnings of newly employed mothers of pre-kindergarten
students in the first year of the program in Maryland would be approximately $87 million, growing
to $382 million by the 10th year of implementation. Not only would this translate into higher
income taxes, but it would also increase property taxes, sales taxes, and a variety of fees. As
indicated in Exhibit 23, earnings and tax payments would expand steadily throughout the first 10
years of implementing the pre-kindergarten program.
Exhibit 23. Earnings and Tax Payments of Employed Mothers (Millions $2020)
Employed
Total
Program year
State tax
Local tax
mothers
earnings
FY 2021
2,308
$87.0
$5.9
$5.0
FY 2022
3,160
$118.8
$8.1
$6.8
FY 2023
4,008
$150.6
$10.3
$8.6
FY 2024
4,796
$180.3
$12.3
$10.3
FY 2025
7,263
$273.0
$18.6
$15.6
FY 2026
7,930
$298.0
$20.3
$17.1
FY 2027
8,498
$319.4
$21.8
$18.3
FY 2028
9,160
$344.3
$23.5
$19.7
FY 2029
9,737
$366.0
$25.0
$21.0
FY 2030
10,170
$382.2
$26.1
$21.9

Total state
and local tax
$10.9
$14.9
$18.9
$22.6
$34.3
$37.4
$40.1
$43.2
$45.9
$48.0

Sources. Kirwan Commission, Bureau of Labor Statistics, Comptroller of Maryland

More workers lead to the expansion of businesses and an increase of sales of goods and services.
This expansion of business increases demands for the goods and services that these businesses need

45
46

Bureau of Labor Statistics, Occupational Employment Statistics (OES) program.
Op. cit., Malik, Rasheed

An Economic Assessment of Kirwan Commission Recommendations

52

 to operate sustainably. These goods and services range widely from office equipment and supplies
to utilities and accounting services.
More workers earning more wages and salaries also translate into higher personal income, which
augments the spending power that helps to drive Maryland’s economy. In the language of economic
impact analysis, demands for goods and services that support the supply chain are considered the
indirect impact of new wages (business-to-business transactions). New demands for goods and
services from consumers are considered the induced impact. In this instance, the direct impact is
attributable to the higher wages earned by mothers of pre-kindergarten students. Then there are the
multiplier effects. On average in Maryland, the multiplier effect for income is 41 percent.47
The estimated total State and local tax revenues generated by mothers who are entering the
workforce because their children are in expanded pre-kindergarten are revealed in Exhibit 24. Total
fiscal impacts rise from $15 million during the first year of pre-kindergarten to $68 million during
the 10th year.
Exhibit 24. Total Fiscal Impacts of Employed Mothers (Millions $2020)

Program year
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
FY 2026
FY 2027
FY 2028
FY 2029
FY 2030

Direct fiscal impacts
$10.9
$14.9
$18.9
$22.6
$34.3
$37.4
$40.1
$43.2
$45.9
$48.0

Indirect and induced
fiscal impacts

Total State & local tax

$4.5
$6.1
$7.7
$9.3
$14.1
$15.3
$16.4
$17.7
$18.8
$19.7

$15.4
$21.0
$26.6
$31.9
$48.4
$52.7
$56.5
$60.9
$64.7
$67.7

Sources. Kirwan Commission, Bureau of Labor Statistics, Comptroller of Maryland, IMPLAN

This average of 41 percent is the sum of the indirect effect (15.6 percent) and the induced effect (25.4 percent).
Estimates are derived from IMPLAN, LLC, an industry-standard econometric program used to estimate economic
impacts of economic activity.
47

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53

 VI. Costs & Benefits of Commission Recommendations
•

There are Benefits, and there are Costs

As has been discussed in many contexts, the implementation of Commission recommendations will
require significant financial investment in Maryland’s pre-k-12 public education system. The
Commission has estimated these costs in their report on a yearly basis from FY2020 until FY2030,
when the recommendations are fully implemented and costs have achieved something akin to a
steady state.
After the Commission calculated costs for each policy area, costs were then reviewed to identify any
potential adjustments. This review identified several areas where the activities of recommendations
in different policy areas overlapped and costs were double counted. This was particularly the case in
Policy Areas 2 and 4 and allowed for significant cost reductions as actions taken to create a highquality and diverse teaching and school leadership staff interacted with the activities needed to
provide the resources needed to make all students successful. This overlap accounted for a majority
of cost reductions.
A second area of significant cost reduction was the impact of implementing Commission
recommendations on the need for special education services. Research has established that a
majority of students in special education programs do not have chronic medical or other conditions
(e.g., autism, intellectual disability) that preclude them from success in school.48 With the early
identification of problems, such as difficulties in learning to read, and the appropriate interventions,
the Commission estimates that referrals to special education programs would be substantially
reduced. Reductions in special education populations account for roughly one-third of the cost
reductions estimated by the Commission.
While the figure of $3.8 billion is often bandied about in these discussions, this estimate already
embodies certain savings such as the predicted large-scale reduction in special education population.
Once one deducts those types of presumed cost savings, the cost of full implementation is actually
in the range of $6 billion per annum. But this money does not simply disappear into the ether.
Much of it circulates back into Maryland’s economy, which in turn creates another set of economic
impacts.

The research on special education and the potential to intervene successfully to reduce the need for special education
programs is discussed in a book by a Commission member. Hettleman, Kalman, “Mislabeled as Disabled,” Radius Book
Group, 2019.
48

An Economic Assessment of Kirwan Commission Recommendations

54

 Exhibit 25 lists as gross cost the initial implementation cost estimates for each policy area by year.
The savings determined for each policy area are also listed, which leads to the net cost per year for
overall implementation of each policy area independently. The policy areas are summarized below:
Policy Area 1. Pre-kindergarten programs for three-year-olds and four-year-olds;
Policy Area 2. High quality and diverse teachers and school leaders;
Policy Area 3. College and career readiness pathways (including career and technical education);
Policy Area 4. More resources to ensure all students are successful; and
Policy Area 5. Governance and accountability.
Exhibit 25. Estimated Costs of Implementing each Commission Recommendations (Millions $2020)

Year
Year 0
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10

FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
FY 2026
FY 2027
FY 2028
FY 2029
FY 2030

Policy
Area 1
$29
$162
$254
$363
$410
$427
$483
$516
$586
$676
$814

Policy
Area 2
$173
$401
$731
$1,014
$1,347
$1,594
$1,821
$2,080
$2,344
$2,572
$2,818

Policy
Area 3
$47
$220
$225
$193
$166
$137
$139
$142
$145
$148
$150

Policy
Area 4
$332
$884
$1,878
$2,137
$2,148
$2,161
$2,172
$2,181
$2,194
$2,207
$2,222

Policy
Area 5
$1
$4
$4
$2
$2
$2
$2
$2
$2
$2
$2

Gross Savings Net
Cost
Cost
$581
$101
$480
$1,672
$173
$1,499
$3,092
$409
$2,684
$3,708
$629
$3,079
$4,073
$879
$3,194
$4,321 $1,088 $3,234
$4,617 $1,294 $3,323
$4,921 $1,520 $3,401
$5,271 $1,755 $3,516
$5,605 $1,961 $3,644
$6,006 $2,174 $3,832

Source. Kirwan Commission

The overwhelming majority of these expenditures for the Commission recommendations constitutes
new demands for public education and support services for public-school students. A smaller
proportion of these expenditures are devoted to Judy Centers and Family Support Centers that
supply support services to the families of public-school students.

An Economic Assessment of Kirwan Commission Recommendations

55

 ➢ Benefits and Costs of Commission Recommendations Over Time
The positive economic impacts of the Commission recommendations are fundamentally driven by
the changes that an improved public education system will make in Maryland’s economy. By better
preparing public-school students for college and careers, Commission recommendations are
anticipated to increase the number of college graduates and to decrease the number of public-school
students who either fail to complete high school or stop their education at the level of a high school
diploma. In better preparing public-school students for careers, the Commission expects
recommendations to increase the number of students who earn vocational certificates designed to
provide gateways to high-skill, high-earning career ladders. As discussed earlier, these improved
educational outcomes can be linked to increases in earnings.
Exhibit 26 summarizes increases in average earnings and associated tax payments for each cohort of
Maryland public-school students. As indicated, earnings increase substantially as educational
attainment increases. Better-educated Marylanders will have fewer demands for the types of public
assistance examined in this report—Medicaid, SNAP, TANF, housing and energy assistance. A
more educated citizenry will also place fewer demands on the criminal justice system, notably State
prisons. The net effect of these changes is an estimated $4.5 billion in increased Maryland State and
local taxes less assistance over a lifetime for each cohort/year of high school graduates.
Exhibit 26. Impacts of Commission Recommendations on Average Lifetime Earnings and Fiscal Benefits
(Millions $2020)
Lifetime earnings with social gain
Lifetime Federal income tax
Lifetime Maryland state and local tax
Cost of public assistance
Total taxes less assistance
Maryland taxes less assistance
Multiplier effect
Total impact

Status quo

Future new status

Change

$103,181
($304)
$8,921
$3,213
$5,405
$5,708
$2,339
$8,047

$134,065
$2,848
$12,540
$2,328
$13,060
$10,212
$4,184
$14,396

$30,884
$3,151
$3,619
($885)
$7,655
$4,504
$1,845
$6,349

Sources. Federal Reserve Board of Richmond, U.S. Census, eFile, Comptroller of Maryland

Additional spending of all these workers in the Maryland consumer economy will support additional
impacts to these earnings. According to Sage estimates, these multiplier effects will increase impacts
listed in the exhibit above by 41 percent.
As discussed above, this multiplier effect increases both earnings and tax payments. The total value
of lifetime Maryland taxes less public assistance costs is estimated to increase from $8.05 billion to
$14.40 billion for each cohort of Maryland public-school students when full effects of Commission

An Economic Assessment of Kirwan Commission Recommendations

56

 recommendations are realized. Thus, full implementation of Commission recommendations is
estimated to increase net tax revenues to state and local government in Maryland by $6.35 billion.
These impacts will phase in over a relatively long period of time. It is expected that it will take 10
years for Commission recommendations to be fully implemented. By the end of that 10-year period,
the Commission expects that 80 percent of high school graduates will be college and career ready.
The end of the initial 10-year implementation period also coincides with an opportunity for students
who graduated during early years of implementation to have completed two- or four-year degrees.
Four years after full implementation comes another milestone as the 80 percent of students who
were college and career ready have had time to complete undergraduate education. Finally, eight
years after full implementation, students who have chosen to pursue an advanced degree would have
had time to complete that education, at least in many instances.
Exhibit 27 summarizes estimated changes in educational attainment associated with each of these
milestones and compares them to current outcomes. As educational attainment increases, the
average income that each cohort of public-school students earns also increases. This increase in
average income is a measure of how much of the ultimate effects of the Commission
recommendations is realized at each milestone. As shown, an estimated 6 percent of final income
impacts are realized in 2025. This increases to 33 percent of final income impacts by 2030, 60
percent in 2034, and 100 percent in 2038.
Exhibit 27. Milestones in Commission Impacts and Effects on Educational Attainment
Initial
80% college 80% college &
Status quo
secondary
& career
career ready
school impact
ready
plus 4 years
Year of milestone
2014
2025
2030
2034
Graduate or Professional
9.3%
9.3%
11.6%
14.0%
degree
Bachelor's degree
15.8%
15.8%
19.8%
23.7%
Some college or Associate
39.9%
45.6%
45.1%
44.9%
degree
High school or equivalent
22.0%
18.3%
14.7%
11.0%
Less than a high school
13.0%
10.9%
8.9%
6.5%
diploma
Total
100.0%
100.0%
100.0%
100.0%
Weighted average income
$49,983
$50,719
$53,739
$56,818
Change in weighted
average income
$0
$736
$3,756
$6,835
Share of final impact
0%
6%
33%
60%

80% college &
career ready
plus 8 years
2038
18.6%
31.6%
32.3%
11.0%
6.5%
100.0%
$61,387
$11,404
100%

Sources. Commission, Sage

An Economic Assessment of Kirwan Commission Recommendations

57

 These increases in average income stand to expand state and local tax collections in Maryland.
Exhibit 28 estimates the net costs and benefits of implementing Commission recommendations
from FY 2020 to FY 2050. This long period reflects the fact that some students who will benefit
from Commission recommendations for prekindergarten will not reach adulthood and their final
levels of educational attainment for decades. The exhibit lists the costs of Commission
recommendations, the fiscal benefits associated with the opportunities for parents of prekindergarten students to enter the workforce, and the fiscal benefits of improved educational
outcomes.
This analysis based estimated tax payments for each income level on a joint return with one
dependent under the age of 18 years. Thus, estimates include the tax benefits of married couples
and tax credits provided for children. It is almost certain that some filers from these cohorts would
be single and pay substantially higher tax rates while married filers would not always have young
dependents. For State and local taxes, the higher rates for single filers could increase tax obligations
by at least 12 percent for those with college degrees and well over 30 percent for those whose
education stopped at high school. Federal tax payments would increase even more. If, for example,
10 percent of filers were single, Maryland State and local tax revenue might increase by 4 percent.
Thus, these estimated benefits summarized in Exhibit 28 almost certainly underestimate the total
increase in tax payments that Maryland State and local governments would collect in the future
when the effects of all Commission recommendations are realized.
Fiscal benefits of better educational outcomes and more elevated attainment include not only the
higher tax payments associated with the higher earning power of future Maryland public-school
students, but also the productivity effects derived from the probability of increased business
investment and greater opportunities for workers to learn from one another, the decrease in the
need for public assistance and services assessed here, and multiplier effects on the direct benefits of
higher earnings of future Maryland public-school students.
Estimated benefits could easily prove conservative. Better educated citizens tend to place many
fewer demands on government for assistance. This analysis has captured some of these diminished
demands, but likely fails to capture the full extent of reduced demands for State and local spending.
This is particularly true for criminal justice and public safety spending. The analysis estimates
reduced demands for State prisons but did not attempt to estimate the likely reductions in costs for
police, courts, and local jails.
Another area where benefits are likely underestimated is health and medical care. The analysis
focuses on reduced spending for Medicaid which provides health insurance to low-income
An Economic Assessment of Kirwan Commission Recommendations

58

 individuals. The research literature is consistent in its findings that better education leads to better
health and health-related outcomes like lower rates of obesity and diabetes, fewer teen pregnancies,
and improved behavioral health, to name a few. While Medicaid spending will reflect many of these
reduced costs, other benefits will almost certainly be realized. These include lower rates of
uncompensated care by hospitals as fewer people use emergency departments for primary care,
fewer demands for emergency medical services provided by fire departments, and so on.
Another potential source of impacts greater than those estimated here is the economic effects of a
greatly increased share of students who earn vocational certificates, participate in apprenticeships, or
achieve other industry-recognized documentation of job readiness. There are clear examples of this
pathway to jobs that earn on a level with four-year college graduates, but no comprehensive data
regarding the expected earnings of those who choose these types of vocational pathways rather than
traditional measures of educational attainment. As noted above, the analysis may underestimate the
future earnings of these individuals.
There is a period during which costs far exceed benefits as Kirwan Commission recommendations
are implemented and relatively few Marylanders are positioned to benefit from implementation as
they remain in school. By FY 2038, fiscal benefits have peaked. As shown, costs increase from FY
2020 to FY 2030, at which point recommendations are fully implemented and costs thereafter are
level. Fiscal benefits associated with prekindergarten workforce impacts also increase from FY 2021
until FY 2030, at which point these benefits level off. Fiscal benefits from better school outcomes
commence in FY 2022 as more students remain in high school and an increasing number of
students graduate from high school. These fiscal benefits increase until FY 2038 at which point it is
estimated that full benefits of the Commission recommendations are realized.
These increasing fiscal benefits first exceed the cost of the Commission recommendations as early as
FY 2034. Thereafter, the annual net cost of the recommendations is negative, that is, benefits
exceed costs on an annual basis. The cumulative costs, however, reflect the mounting costs over the
initial decade and a half that costs exceed fiscal benefits.
By FY 2034, as annual fiscal benefits exceed annual costs, these cumulative costs begin to decrease.
By FY 2046, Maryland’s economy is large enough and worker earnings are high enough such that
the cumulative net fiscal benefits turn positive. At that point, the net benefits are presumed to
continue into economic perpetuity at $2.6 billion annually. At that point, Maryland’s economy
would be on a different path altogether.

An Economic Assessment of Kirwan Commission Recommendations

59

 Exhibit 28. Estimated Net Costs and Fiscal Benefits of Implementing the Commission Recommendations
(Millions $2020)

Year

Costs

FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
FY 2026
FY 2027
FY 2028
FY 2029
FY 2030
FY 2031
FY 2032
FY 2033
FY 2034
FY 2035
FY 2036
FY 2037
FY 2038
FY 2039
FY 2040
FY 2041
FY 2042
FY 2043
FY 2044
FY 2045
FY 2046
FY 2047
FY 2048
FY 2049
FY 2050

$480
$1,499
$2,684
$3,079
$3,194
$3,234
$3,323
$3,401
$3,516
$3,644
$3,832
$3,832
$3,832
$3,832
$3,832
$3,832
$3,832
$3,832
$3,832
$3,832
$3,832
$3,832
$3,832
$3,832
$3,832
$3,832
$3,832
$3,832
$3,832
$3,832
$3,832

Prekindergarten
workforce fiscal
benefits
$0
$15
$21
$27
$32
$48
$53
$57
$61
$65
$68
$68
$68
$68
$68
$68
$68
$68
$68
$68
$68
$68
$68
$68
$68
$68
$68
$68
$68
$68
$68

Better school
outcome fiscal
benefits
$0
$0
$102
$205
$307
$410
$746
$1,082
$1,419
$1,755
$2,091
$2,520
$2,948
$3,377
$3,805
$4,441
$5,077
$5,713
$6,349
$6,349
$6,349
$6,349
$6,349
$6,349
$6,349
$6,349
$6,349
$6,349
$6,349
$6,349
$6,349

Annual net cost

Cumulative net
cost

$480
$1,484
$2,560
$2,847
$2,855
$2,776
$2,524
$2,262
$2,036
$1,825
$1,673
$1,244
$816
$387
($41)
($677)
($1,313)
($1,949)
($2,585)
($2,585)
($2,585)
($2,585)
($2,585)
($2,585)
($2,585)
($2,585)
($2,585)
($2,585)
($2,585)
($2,585)
($2,585)

$480
$1,964
$4,524
$7,371
$10,226
$13,001
$15,526
$17,788
$19,824
$21,649
$23,322
$24,566
$25,382
$25,769
$25,727
$25,050
$23,737
$21,787
$19,202
$16,617
$14,031
$11,446
$8,861
$6,276
$3,690
$1,105
($1,480)
($4,066)
($6,651)
($9,236)
($11,822)

Source. Commission, Sage

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60

 Conclusion
Maryland’s current educational outcomes are mediocre and disparities are massive. The Kirwan
Commission has recommended a set of interventions designed to better prepare Maryland’s publicschool students at every grade level and upon graduation. In this report, Sage translates estimates of
improved educational outcomes as interventions are implemented into economic and fiscal ones.
Projected benefits come with costs. By FY 2033, Sage estimates that State and local authorities will
have cumulatively invested $25.8 billion more in public education than they will have received in
offsetting revenues through expanded earnings and higher labor force participation. But thereafter,
cumulative costs decline as annual fiscal benefits come to exceed annual implementation costs. By
FY 2038, the level of annual fiscal benefit to State and local governments peaks and by FY 2046,
Maryland will have more than fully recovered its expanded investment in preK-12 education.

An Economic Assessment of Kirwan Commission Recommendations

61

 Appendices
Educational attainment has very broad effects on a populace. Most well-known is the correlation
between higher levels of educational attainment and higher earning power. As discussed in the main
body of this report, there are also correlations (often inverse) between educational attainment and
the need for public assistance in various forms as well as the likelihood that individuals will be
involved in the criminal justice system.
These Appendices supply additional background information regarding these topics. Much of this
information has typically been used in summary form in the main body of the report.

➢ Educational Attainment & Lifetime Earnings
Maryland is home to many well-educated people. Indeed, according to one recent assessment,
Maryland is the second most educated state in the nation after Massachusetts.49 Exhibit A-1 reflects
the educational attainment of Maryland’s adult population over nearly half a century. The
proportion of that population that has a college degree has almost tripled, while the category that
encompasses those with less than a high school diploma has dropped from almost half the
population to just 10 percent of the population.
Exhibit A-1. Maryland Educational Attainment Trends, 1970-2017

Educational attainment
College degree
Some college
HS
Less than HS

1970
13.9%
9.9%
28.4%
47.6%

1980
20.4%
14.6%
32.5%
32.6%

1990
26.5%
23.9%
28.2%
21.6%

2000
31.4%
25.7%
26.7%
16.2%

2010
35.8%
25.6%
26.4%
12.2%

2017
39.7%
25.8%
24.5%
10.1%

Source. Federal Reserve Bank of Richmond

As the home of many well-educated adults, it is logical that the educational attainment of
Marylanders exceeds that of the typical American adult. Exhibit A-2 compares educational
attainment in Maryland to that of the nation as a whole. Maryland has consistently registered a
higher proportion of adults with a college degree and a lower proportion of those with only some
college experience, a high school diploma, or less than a high school diploma.

Hess, Abigail, “The 10 most and least educated states in 2018,” January 23, 2018, CNBC.
https://www.cnbc.com/2018/01/23/the-10-most-and-least-educated-states-in-2018.html.
49

An Economic Assessment of Kirwan Commission Recommendations

62

 Exhibit A-2. Maryland Educational Attainment as Percentage of U.S., 1970-2017

Educational attainment
College degree
Some college
HS
Less than HS

1970
129.9%
93.4%
91.3%
99.8%

1980
125.9%
93.0%
93.9%
97.3%

1990
130.5%
96.0%
47.0%
87.1%

2000
128.7%
93.8%
93.4%
82.7%

2010
127.4%
88.6%
102.1%
84.7%

2017
124.1%
89.3%
90.4%
84.2%

Source. Federal Reserve Bank of Richmond

Not only are citizens of Maryland more likely to be associated with higher educational attainment,
they are also likely to earn more than the typical, comparably educated American. As reflected in
Exhibit A-3, Maryland residents consistently out-earn typical American workers at every level of
educational attainment. Unemployment rates for Marylanders with college degrees from four-year
situations were somewhat lower than typical American with such college degrees, while Marylanders
with no more than an Associate degree had slightly higher rates of unemployment compared to
typical Americans. Adults in Maryland were consistently more likely to participate in the labor force
than typical Americans regardless of their level of educational attainment.
Exhibit A-3. Median Earnings and Workforce Characteristics, Maryland v. US, 2017

Median earnings

Educational attainment
Graduate or Professional degree
Bachelor’s degree
Some college or Associate degree
High school or equivalent
Less than a high school diploma

MD
$82,432
$61,640
$42,707
$35,409
$26,309

U.S.
$70,097
$52,484
$36,190
$30,624
$23,031

Unemployment
rate
MD
U.S.
2.3%
2.6%
2.3%
2.6%
4.4%
4.3%
6.5%
5.7%
8.6%
8.0%

Labor force
participation rate
MD
U.S.
89.6%
86.6%
89.6%
86.6%
82.6%
79.2%
76.0%
72.2%
63.8%
60.2%

Source. Federal Reserve Bank of Richmond

The median is the value which separates any population into two equal halves. With earnings, the
average is often significantly different than the median. Exhibit A-4 compares median and average
earnings of all U.S. adults by educational attainment. As indicated, the discrepancy between average
and median earnings can be substantial, but in some cases, for example, for those with less than a
high school degree, the median and average are close since relatively few members of this
demographic segment earn significant amounts of money.

An Economic Assessment of Kirwan Commission Recommendations

63

 Exhibit A-4. Estimated Average Earnings by Educational Attainment

Educational attainment
Doctoral degree
Professional degree
Master's degree
Bachelor’s degree
Associate degree
Some college, no degree
High school or equivalent
Less than a high school diploma
Weighted average

U.S. earnings
Median
Average
$90,636
$120,954
$95,472
$140,003
$72,852
$87,880
$60,996
$68,252
$43,472
$45,637
$40,248
$38,184
$37,024
$38,006
$27,040
$26,513
$47,164
$53,536

Average as
share of median
133%
147%
121%
112%
105%
95%
103%
98%
114%

Source. Bureau of Labor Statistics, U.S. Census

Exhibit A-5 utilizes national data regarding median and average earnings to adjust median earnings
in Maryland to average earnings. Because national data disaggregate categories of educational
attainment into a finer level of detail, weighted averages, based on the number of workers at each
educational level, are used for the earnings of those with advanced degrees and those with some
college or an Associate degree. The average earnings in Exhibit A-5 are used to estimate the
earnings of current Maryland public-school students and future Maryland public-school students
after Commission recommendations have been fully implemented.
Exhibit A-5. Median and Average Earnings by Educational Attainment, Maryland, 2017

Educational attainment
Graduate or Professional degree
Bachelor’s degree
Some college or Associate degree
High school or equivalent
Less than a high school diploma

Median
earnings
$82,432
$61,640
$42,707
$35,409
$26,309

Adjustment
factor
125.6%
111.9%
98.6%
102.7%
98.1%

Average
earnings
$103,549
$68,973
$42,098
$36,348
$25,796

Source. Federal Reserve Bank of Richmond

Using the median earnings reflected in Exhibit A-3, the net present value (NPV) of lifetime earnings
can be estimated. Exhibit A-6 lists those median earnings as well as the likely span of years that
Marylanders will spend in the labor force. It is assumed that high school dropouts begin work at age
18, those with a high school diploma or its equivalent begin work at age 19, those with an Associate
degree at age 21, those with a Bachelor’s degree at age 23, and those with an advanced degree at age
26. In each instance, it is assumed that workers retire at age 65. Consequently, greater educational
attainment reduces the number of years that one participates in the labor force. Nevertheless,
higher earnings associated with greater educational attainment more than countervail reductions in
the number of presumed years in the workforce.

An Economic Assessment of Kirwan Commission Recommendations

64

 Exhibit A-6. Lifetime Earnings of Maryland Adults

Educational attainment
Graduate or Professional degree
Bachelor’s degree
Some college or Associate degree
High school or equivalent
Less than a high school diploma

Median
earnings

Age at
starting work

Years in
labor force

NPV
(millions)

$82,432
$61,640
$42,707
$35,409
$26,309

26
23
21
19
18

40
43
45
47
48

$1.91
$1.50
$0.96
$0.74
$0.46

Source. Federal Reserve Bank of Richmond, Sage

➢ Educational Attainment & Social Impacts
An assessment of the impacts of Commission recommendations depends on an understanding of
what higher educational attainment means for the population of Marylanders who attend publicschools. This in turn requires an estimate of the demands this population would place on public
assistance and government services and how that might change with better educational outcomes.
Accordingly, this analysis has focused on quantifying the costs of supplying government services and
allocating these costs to populations divided by educational attainment on a per capita basis. The
following discussion provides additional background regarding these costs and their allocation by
educational attainment.
Because more education is directly correlated with more income, it is unsurprising that those with
more education place fewer demands on government for public assistance. Exhibit A-7 summarizes
the relationship between educational attainment and the receipt of government means-tested
assistance by families. As indicated, there is a disproportionate reliance on government assistance
among those with less education. For example, 11 percent of all families fell into the category of
less than a high school diploma, but those families represented 21 percent of all families receiving
public assistance. Alternatively, 36 percent of families were categorized as having at least a four-year
college degree, but only constituted 12 percent of families receiving assistance.
Exhibit A-7. Characteristics of U.S. Families with Children Under 18, by Receipt of Government MeansTested Assistance, 2014
Type of family
Families receiving
receiving
assistance
Item
All
No assistance
Assistance
1-parent
2-parent
Number of families (000)
31,596
24,931
6,665
3,037
3,628
Education (reference person):
Less than high school
11.5%
9.1%
20.8%
18.9%
22.5%
High school graduate
21.8%
18.1%
35.7%
40.4%
31.9%
Some college or associate degree 30.7%
30.4%
31.8%
34.1%
29.9%
Bachelor's degree or higher
35.9%
42.4%
11.6%
6.7%
15.7%
Total
100.0%
100.0%
100.0%
100.0%
100.0%
Source. Bureau of Labor Statistics

Note. Numbers may not add due to rounding.

An Economic Assessment of Kirwan Commission Recommendations

65

 Similarly, the more education one receives, the less likely it is that one is living in poverty. In 2017,
almost one in four adults with less than a high school diploma was living in poverty. By stark
contrast, fewer than 5 percent of adults with at least a four-year college degree were living in
poverty. See Exhibit A-8.
Exhibit A-8. Educational Attainment and Poverty, 2017

Educational Attainment
Less than high school
High school graduate
Some college or associate degree
Bachelor’s degree or higher
Total

Total number of
persons (000)
22,411
62,685
57,810
76,924
219,830

Persons in
poverty (000)
5,485
7,942
5,075
3,661
22,163

Share of cohort
24.5%
12.7%
8.8%
4.8%
10.1%

Source. U.S. Census Bureau, Current Population Survey.

A more specific look at the types of public assistance and the likelihood receiving that assistance is
presented in Exhibit A-9. The exhibit presents the proportion of adults aged 25 through 34 who
receive food stamps, Medicaid, or public welfare/assistance. For each of these types of public
assistance, the likelihood of being a recipient declines as educational achievement increases. For
those failing to complete high school, 38 percent receive food stamps and 34 percent are covered by
Medicaid. At the other end of the spectrum, those with advanced graduate degrees, 3 percent
receive food stamps and 4 percent are covered by Medicaid. A much smaller share of adults 25
through 34 received public welfare/assistance, but, as with other assistance, the proportion
decreases with more educational attainment.
Exhibit A-9. Educational Attainment and Public Assistance, U.S. 2016, Receipt of Select Governmental
Assistance by Level of Education, Ages 25–34 (Percent Receiving Public Assistance)

Characteristic
Food stamps (SNAP)
Medicaid
Public Assistance
(including TANF)

No HS
diploma

HS grad,
only

38%
34%

26%
26%

Some
college,
no degree
19%
20%

4%

3%

2%

Associate Bachelor's
Graduate
degree
degree +
13%
14%

5%
6%

3%
4%

2%

1%

0%

Source. U.S. Census Bureau, American Community Survey; Urban Institute

Food stamps are provided through a program commonly known as SNAP. In 2017, 11 percent of
Maryland’s population received these benefits. The average monthly benefit to an individual
recipient was $120. These numbers were slightly lower than national averages as shown in Exhibit
A-10.

An Economic Assessment of Kirwan Commission Recommendations

66

 Exhibit A-10. SNAP in Maryland, 2017

Average monthly SNAP benefit
Share of
Per
Recipients
Per HH
Per HH
Per senior
population
Per HH
working
member

MD
US

684,000
42,000,000

11%
13%

$120
$126

with kids

$221

$371

HH

HH
$278

$100

Per nonelderly
disabled HH
$164

Source. Center on Budget and Policy Priorities, Maryland SNAP Fact Sheet

Today, public welfare is known as Temporary Assistance to Needy Families (TANF). In
2016/2017, more than 20,000 Maryland families received TANF. Families receiving this form of
public assistance represented 39 percent of all Maryland families in poverty at that time. The
average Maryland benefit was $677/month, which represented 39 percent of the value of the federal
poverty level for those recipients. See Exhibit A-11.
Exhibit A-11. TANF in Maryland, 2016/2017

Poor families
receiving
TANF
MD
US

39%
23%

MD families 2016/2017
on
AFDC/TANF
20,185

in poverty
51,858

in deep
poverty
16,311

Maryland
Share of
TANF
federal
benefit level poverty level
$677

39%

Source. Center on Budget and Policy Priorities, Maryland TANF Fact Sheet

In June 2019, more than 1.3 million Maryland residents were enrolled either in Medicaid or CHIP,
of which the latter serves children. As indicated in Exhibit A-12, the cost of Medicaid per enrollee
in FY 2019 was $7,726. The federal government covers much of this expense.
Exhibit A-12. Medicaid in Maryland
Total Medicaid & CHIP
Enrollment (Preliminary)

June 2019

MD
Per enrollee

1,313,070

TOTAL Medicaid
budget in FY19
(000)

Federal
share (000)

Maryland
share (000)

$10,144,909
$7,726

6,184,534
$4,710

$3,960,375
$3,016

Source. Kaiser Family Foundation, Maryland Department of Health

The U.S. Census Bureau collects information regarding educational attainment and health insurance.
Consistent with other characteristics, greater education is associated with greater health insurance
coverage, particularly private insurance and employer-provided insurance. Conversely, coverage by
Medicaid was inversely correlated with educational attainment, with 29 percent of those without a
high school diploma being covered by Medicaid and 6 percent of those with at least a Bachelor’s
degree were covered by Medicaid. Exhibit A-13 supplies detailed information regarding the
statistical connections between health insurance and educational attainment.

An Economic Assessment of Kirwan Commission Recommendations

67

 Exhibit A-13. Educational Attainment and Health Insurance in the U.S., 2017
Some
No HS HS grad,
Characteristic
Total
college,
diploma
only
no degree
Total
Not covered at any time
during the year
Covered by some type of
health insur. during the year
Covered by private
insurance
Covered by Employment
based
Covered by Own
Employment based
Covered by Directpurchase insurance
Covered by government
health plan
Covered by Medicaid
Covered by Medicare
Covered by military related
health care
Covered by Medicaid and
private insurance
Covered by Medicare and
private insurance
Covered by Medicare and
Medicaid

Associate Bachelor's
degree
degree +

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

9.9%

18.2%

12.4%

9.7%

8.3%

5.3%

90.1%

81.8%

87.6%

90.3%

91.7%

94.7%

68.4%

42.4%

60.8%

68.8%

72.7%

82.4%

55.9%

31.4%

47.3%

56.0%

60.5%

70.3%

36.8%

15.5%

30.9%

31.3%

41.0%

51.2%

17.5%

14.7%

18.0%

17.7%

17.4%

18.0%

36.4%

52.2%

42.8%

36.4%

32.8%

26.4%

13.7%
22.2%

28.6%
29.3%

17.1%
26.2%

14.4%
19.8%

10.9%
19.9%

6.1%
18.2%

4.8%

2.7%

4.5%

6.2%

6.0%

4.6%

3.6%

4.7%

4.3%

4.1%

3.3%

2.5%

10.2%

8.3%

11.2%

9.6%

9.4%

10.5%

2.4%

6.9%

3.0%

1.8%

1.9%

0.9%

Source. U.S. Census Bureau, Current Population Survey, 2018 Annual Social and Economic Supplement. Table HI01.
Health Insurance Coverage Status and Type of Coverage by Selected Characteristics: 2017. Note. Estimates by type of
coverage are not mutually exclusive; people can be covered by more than one type of health insurance during the year.

State and local governments in Maryland spend considerable portions of their revenue on housing
programs to address homelessness, encourage affordable housing, and provide subsidies to low
income renters. They also provide assistance with energy costs. State programs are operated by the
departments of Maryland Housing and Community Development (MHCD) and Maryland Human
Services (MHS). Exhibit A-14 summarizes spending for FY 2018, which totals in excess of $450
million. This analysis assumes that these expenditures are allocated in a manner similar to
expenditures on SNAP.

An Economic Assessment of Kirwan Commission Recommendations

68

 Exhibit A-14. State and Local Spending on Housing and Energy Assistance

FY 2018 Budget
(millions)
$40.9
$270.5
$59.4
$82.8
$453.5

Housing and Building Energy Programs, MHCD
Rental Services MHCD
Energy assistance, MHS
Dev. and Public Housing, Counties
Total
Sources. Maryland state budget, Maryland Association of Counties

➢ Educational Attainment & Incarceration
Another way in which educational attainment affects government expenditures is found in the
criminal justice system. There are clear and consistent data across the US as well as in some states
demonstrating that a very high proportion of incarcerated men and women failed to complete high
school. Exhibit A-15 summarizes national data as well as data for Georgia and Maryland linking
educational attainment and incarceration.
A 2012 report by a task force established by the Maryland Legislature found that 57 percent of state
prisoners under the age of 25 had failed high school and another 17 percent only had a high school
diploma. This share of Maryland prisoners under the age of 25 who had not finished high school
was higher than for the national population and for Georgia based on a report specific to that state.
Nevertheless, the overall picture of lower educational attainment and higher rates of incarceration is
consistent across communities.
Exhibit A-15. Educational Attainment and Incarceration
Population

Year

US

2009

US

2004

US

2009

US

2009

Georgia

2016

Maryland

2011

Who
All male state
prisoners
All male state
prisoners
Incarcerated
men
Incarcerated
women
All state
prisoners
State
prisoners
< 25 years old

Total
number

Less
HS
than HS diploma

GED

Some
Completed College
college or
tech
degree
tech

1,122,011

39.5%

15.8%

22.3%

22.4%

-

-

1,124,000

36.3%

21.7%

30.5%

11.5%

-

-

1,947,103

40.2%

17.4%

19.8%

22.6%

-

-

195,927

36.5%

17.1%

16.0%

30.5%

-

-

14,888

49.6%

9.0%

0.5%

1.5%

2,195

57.2%

-

-

-

39.5%
17.1%

-

Sources. Prison Policy Initiative, Georgia Department of Corrections, Maryland Task Force to Study High School
Dropout Rates of Persons in the Criminal Justice System

An Economic Assessment of Kirwan Commission Recommendations

69

 The analysis presented in this report focuses on the costs for public services, including incarceration,
on the basis of the average adult in Maryland. Exhibit A-16 presents data to estimate the likelihood
that an adult in Maryland would be incarcerated by level of educational attainment. As indicated, the
share of the population that is incarcerated decreases substantially with higher levels of education.
Thus, only 0.3 percent of adult Marylanders with a high school diploma, but no college are
incarcerated. This share increases slightly to 0.4 percent of adult Marylanders who attended college
but did not earn a degree, but then drops to 0.1 percent of adult Marylanders who received a degree
from a two-year or four-year college. On average, 0.4 percent of the Maryland population 25 years
and older is incarcerated.
Exhibit A-16. Maryland Population 25 Years and Older and Incarceration, 2017
Total
Incarcerated
Share of population 25 years
population
population
and older that is incarcerated
Less than a high school diploma
417,716
9,492
2.3%
High school diploma, no college
1,027,608
2,854
0.3%
Some college, no degree
786,290
3,153
0.4%
Associate degree
266,816
Bachelor’s degree
860,298
1,095
0.1%
Advanced degree
736,699
Total
4,095,427
16,594
0.4%
Sources. U.S. Census Bureau, Maryland Task Force to Study High School Dropout Rates of Persons in the Criminal Justice System, Sage

Incarceration is expensive. In FY2018, Maryland spent $870 million on prison operations,
construction, and maintenance. The total prison population in FY2018 was 18,635. In other words,
the State of Maryland spent almost $47,000 for each prisoner that year. Prisoners are generally
released to some type of community supervision, parole, or probation. These costs exceeded $122
million or more than $3,000 for each individual under community supervision. See Exhibit A-17.
Exhibit A-17. State Incarceration and Community Supervision Costs, FY2018

Factor
Prison operations, capital construction, facilities maintenance
No. of incarcerated
Cost per prisoner
Total cost: Community supervision, parole and probation
Number. under community supervision, parole and probation
Cost per person under community supervision

Value
$870,900,867
18,635
$46,735
$122,335,415
39,134
$3,126

Sources. Maryland Department of Public Safety and Correctional Services, Sage

The Maryland Department of Public Safety and Correctional Services reports that the average length
of stay for a state prisoner in FY2018 was 82 months, nearly 7 years. The most recent data from the
Department of Corrections indicate that roughly 40 percent of prisoners who are released returned
to prison within three years. For purposes of this analysis regarding the economic implications of
An Economic Assessment of Kirwan Commission Recommendations

70

 implementing Kirwan Commission recommendations with fidelity, it is assumed that when released,
the typical prisoner falls under community supervision for at least one year. These data allow for an
estimation of the incarceration costs per state prisoner in Maryland.
Exhibit A-18 presents a stream of costs that permit a net present value of incarceration
computation. The calculation assumes that a typical prisoner spends seven years in a state prison
followed by one year of community supervision. Three years after release, the calculation assumes
that there is a 40.5 percent probability that this prisoner will return to prison for another seven years,
followed by yet another year of community supervision. The calculation also assumes that current
costs (from FY2018) increase at a rate of 2 percent annually.
The exhibit then lays out an 18-year stream of costs associated with a hypothetical prisoner. The
first seven years represent full costs of incarcerating a state prisoner. The eighth year is the cost of
one year of community supervision followed by two years of no cost. In years 11 through 17, 40.5
percent of the inflation-adjusted annual cost of incarceration is incurred followed by one year of
community supervision. The net present value of this stream of costs over 18 years is $386,130.
Exhibit A-18. Lifetime State Incarceration and Community Supervision Costs per Prisoner
Costs assigned to
Year
Incarceration costs
Parole probation costs
typical prisoner
1
$46,735
$3,126
$46,735
2
$47,669
$3,189
$47,669
3
$48,623
$3,252
$48,623
4
$49,595
$3,317
$49,595
5
$50,587
$3,384
$50,587
6
$51,599
$3,451
$51,599
7
$52,631
$3,520
$52,631
8
$53,683
$3,591
$3,591
9
$54,757
$3,663
$0
10
$55,852
$3,736
$0
11
$56,969
$3,811
$23,073
12
$58,109
$3,887
$23,534
13
$59,271
$3,965
$24,005
14
$60,456
$4,044
$24,485
15
$61,665
$4,125
$24,974
16
$62,899
$4,207
$25,474
17
$64,157
$4,291
$25,983
18
$4,377
$4,377
Net present value
$386,130
Sources. Maryland Department of Public Safety and Correctional Services, Sage

An Economic Assessment of Kirwan Commission Recommendations

71

 This computed net present value cost for incarceration and community supervision and the earlier
calculation of the proportion of adult Marylanders who are incarcerated allows for an estimate of the
average lifetime incarceration and community supervision costs for each adult Marylander. These
estimates are presented in Exhibit A-19.
Because 2.27 percent of adult Marylanders with less than a high school diploma are incarcerated,
2.27 percent of the lifetime cost of this incarceration and community supervision are assigned to the
average adult Marylander without a high school diploma. Similar calculations are generated for adult
Marylanders with a high school diploma or its equivalent, some college but no degree, and a college
degree. As indicated, the cost per adult Marylander drops radically with educational attainment,
falling to $199 for those with a high school diploma, five dollars to those with some college, and
essentially zero for those who have a college degree.
Exhibit A-19. Lifetime State Incarceration and Community Supervision Costs per Adult Marylander
Less than a HS
HS diploma,
Some college,
Educational attainment
College degree
diploma
no college
no degree
Share of general population 25
2.27%
0.28%
0.40%
0.06%
years and older
Share of NPV of lifetime
incarceration & community
$8,774
$199
$5
$0
support costs
Sources. Maryland Department of Public Safety and Correctional Services, Sage

An Economic Assessment of Kirwan Commission Recommendations

72

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