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 over $30,000 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 amount 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 in general offer lower-income 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 whose parents graduated from college but who did not themselves graduate 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 2017-2018 was 85%.

High School Graduation Rates

New Jersey and Iowa are tied for the best graduating rate (91%). Iowa 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 Wisconsin, Tennessee, Texas, Alabama, Kentucky, 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 four states that graduate 89% of their students are Nebraska, Montana, Arkansas, and New Hampshire. Another four states graduate 88% of their students: North Dakota, Virginia, Connecticut, and Massachusetts. 

Lower High School Graduation Rates

The state with the lowest percentage of graduating students is New Mexico at 74%. Next are Oregon, Arizona, and Alaska, each at 79%.

New Mexico 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 overall birth rates. Teenage mothers are more likely to drop out of high school in this state.

Colorado, Louisiana, Idaho, Michigan, and South Carolina graduated 81% of their students, while Oklahoma, Ohio, Georgia, Wyoming, and New York graduated 82%.

Spending Per Student

The average spending per U.S. public elementary school student was $13,962 in 2017, according to the National Center for Education Statistics.

The top 10 states that spent the most, spent about 30% to 100% more than the average.

  1. New York—$25,985
  2. Connecticut —$21,647 
  3. New Jersey—$21,531
  4. Wyoming—$20,508
  5. Delaware—$20,035 
  6. Vermont—$19,702 
  7. Massachusetts—$19,101 
  8. Alaska—$18,897
  9. Pennsylvania—$18,149
  10. Rhode Island—$18,020 

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

Six states—New York, Delaware, Alaska, Pennsylvania, Rhode Island, and Wyoming—are not among the top 10. In fact, Alaska is among the bottom 10.

The 10 lowest spending states spend more than 25% less than the average.

  1. Alabama—$10,590
  2. Nevada—$10,384 
  3. Florida—$10,227
  4. Tennessee—$10,062
  5. Mississippi—$9,838
  6. North Carolina—$9,342
  7. Arizona —$9,214
  8. Oklahoma—$9,167 
  9. Utah—$8,726
  10. Idaho—$8,665

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. Federal Reserve Bank of New York. "Despite Rising Costs, College Is Still a Good Investment." Accessed Nov. 30, 2020.

  2. United States Census. "New Data Show Income Increased in 14 States and 10 of the Largest Metros." Accessed Nov. 30, 2020.

  3. The Nation's Report Card. "State Profiles." Accessed Nov. 30, 2020.

  4. Federal Reserve Bank of St. Louis. "The Financial Returns From College Across Generations: Large but Unequal." Accessed Nov. 30, 2020.

  5. National Center for Education Statistics. "Public High School Graduation Rates." Accessed Nov. 30, 2020.

  6. Des Moines Public Schools. "SUCCESS." Accessed Nov. 30, 2020.

  7. West Virginia Department of Education. "West Virginia Continues to Lead the Nation in High School Graduation Rates." Accessed Nov. 30, 2020.

  8. CDC. "State and Territorial Data." Accessed Nov. 30, 2020.

  9. National Center for Education Statistics. "Revenues and Expenditures for Public Elementary and Secondary Education: FY 17," Pages 9-10. Accessed Nov. 30, 2020.