State Ranking by Education

A Quick Look at Education Rates and the Effect on a State's Economy

Rear view of students sitting at graduation ceremony
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Education is necessary for economic mobility. Americans with college degrees are paid about $32,000 more than those with only high school degrees. This gives them enough to save and acquire wealth.

Education is so critical for success that many advocate equity in education. This advocates that students be given the education they need to perform at an acceptable level. Equity in education is a step beyond equal education––which only promises the same level of funding.

Equity in Education

Without equity, education can create structural inequality. Children who don’t get that start in life won’t do as well as their better-educated peers. As a result, they will not be able to afford quality education for their children. It creates a domino effect on income inequality.

But there is a great discrepancy between education levels by state. One reason for the discrepancy is the strength of the state economy. Another is the number of funding states devote to education. But the investment isn’t enough. States must also devote specialized programs to children most at risk. This includes efforts to prevent teenage pregnancy.

Education Score by State

Since education and wealth are so highly correlated, it makes sense that states with the strongest economies are more likely to have the best education scores.

According to the Department of Education’s Nation’s Report Card, these are the 10 highest states in eighth-grade reading scores.

Top 10

  1. Massachusetts
  2. New Jersey
  3. Connecticut
  4. Vermont
  5. New Hampshire
  6. Utah
  7. Wisconsin
  8. Colorado
  9. Ohio
  10. Idaho

Of these, 50% are also among the states with the highest median incomes. They are New Jersey, Massachusetts, Connecticut, Utah and New Hampshire . These states are bedroom communities for major metropolitan areas. That helps them attract world-class universities that improve their education rankings.

This list shows the states with the lowest eighth-grade reading scores, with New Mexico having the worst scores in the nation.

  1. Oklahoma
  2. Hawaii
  3. Nevada
  4. Louisiana
  5. Mississippi
  6. Texas
  7. West Virginia
  8. Alabama
  9. Alaska
  10. New Mexico

These states’ economies depend on agriculture, oil, and coal. These industries do generally are lower incomes positions, with not as many high-paying jobs as high tech, health care, and finance.

The Effects of Education

A high school diploma is necessary to get into college and get a good-paying job. A 2018 Federal Reserve study found there are three ways education creates wealth. First, families headed by educated parents earn more than those without college degrees. That gives the children a head start in life. They can attend private schools and receive better education themselves.

Second is an upward-mobility effect. It occurs when a child is born into a family without a college degree. Once the child earns a diploma, the entire family becomes wealthier. The study found it boosted family wealth by 20 percentiles. In families where both the parents and child graduated from college, wealth improved by 11 percentiles.

Third, a downward-mobility effect is created. Children whose parents didn't graduate from college fell 10 percentiles in wealth. Children with college-educated parents who didn't graduate college did worse. They fell 18 percentiles in wealth.

The National Center for Education Statistics reports on the percentage of students who graduated on time. Each state submits data to the U.S. Department of Education on how many 9th grade students receive their diploma in four years. The U.S. average for 2015-2016 was 85%.

High School Graduation Rates

Iowa has the best graduating rate (91%). The state has a special program, SUCCESS, that assigns case managers to help the students most at risk. For some of these students, the case manager is the only adult that advocates for them. Many of these students dropped out.

Next are New Jersey and West Virginia at 90%. West Virginia created an Early Warning System to identify students at risk of dropping out. The system measures 45 indicators such as attendance, behavior, and grades. It allows teachers to provide the support these students need to stay in school.

The five states that graduate 89% of their students are Kentucky, Missouri, Nebraska, Tennessee, and Texas. Six states graduate 88% of their students: Maryland, Massachusetts, New Hampshire, North Dakota, Vermont, and Wisconsin.

Lower High School Graduation Rates

The state with the lowest percentage of graduating students is New Mexico at 71%. This was actually a 2.5% increase over the prior year. Next is Nevada at 74%, Oregon at 75%, and Alaska at 76%.

Nevada and Alaska have low eighth-grade reading scores. Students who don’t read well at this level will logically have more trouble graduating. Alaska also has one of the highest birth rates. Teenage mothers are more likely to drop out of high school in this state.

Colorado, Georgia, and Louisiana saw 79% of their students graduate. Arizona, Idaho, Michigan, and Washington graduated 80% of their students. All other states were closer to the average except Alabama, who had miscalculated their scores. They graduated between 81% and 87% of their students.

Spending Per Student

The average spending per U.S. public elementary school student was $12,953, according to the National Center for Education Statistics. The most recent figures are for the 2015-2016 school year.

The top 10 states that spend the most, spend 50% to 100% more than the average.

  1. New York—$21,418
  2. Alaska—$20,191
  3. New Jersey—$18,370
  4. Vermont—$18,348
  5. Connecticut—$18,340
  6. Wyoming—$16,406
  7. Rhode Island—$15,873
  8. Massachusetts—$15,503
  9. New Hampshire—$15,340
  10. Maryland—$14,199

Five of these states are also among the top 10 reading scores. They are Connecticut, Massachusetts, New Jersey, New Hampshire, and Vermont. But high spending doesn’t always translate into high scores.

Five states—Alaska, Maryland, New York, Rhode Island, and Wyoming—are not among the top 10. In fact, Alaska is among the bottom 10—due to a high birth rate and a raised testing standard in 2015. As a result, students tested lower.

The 10 lowest spending states spend at least 10% less than the average.

  1. South Dakota—$9,175
  2. Texas—$8,975
  3. Nevada—$8,850
  4. Tennessee—$8,802
  5. North Carolina—$8,721
  6. Mississippi—$8,685
  7. Oklahoma—$8,048
  8. Arizona —$7,652
  9. Idaho—$7,082
  10. Utah—$6,851

Bottom Line

Education and earning potential are directly related. People with access to a higher level and quality of education usually become better income earners and more economically mobile. Those with less or no access may not have the same financial opportunities.

As such, college graduates have a higher chance of building their wealth than high school graduates. Those who don’t graduate from college won’t qualify for higher-paying jobs, better their living standards, or help them afford a good education for their children.

States that boast high average income usually have the highest education scores. Washington, Massachusetts, and New Jersey, for instance, have world-class universities and high standards of living. Conversely, states with low quality of education, such as New Mexico and Alaska, present low average incomes. These places have also produced a low percentage of high school graduates. 

Article Sources

  1. Association of Public & Land-Grant Universities. "How Does a College Degree Improve Graduates’ Employment and Earnings Potential?" Accessed June 12, 2020.

  2. QS. "Does Higher Education Reinforce Inequality?" Accessed June 12, 2020.

  3. The Nation's Report Card. "State Profiles." Accessed June 12, 2020.

  4. United States Census. "New Data Show Income Increased in 14 States and 10 of the Largest Metros." Accessed June 12, 2020.