The Case for Investing in Public Schools

The Economic and Social Benefits of Public Schooling in Australia
by Eliza Littleton, Fiona Macdonald and Jim Stanford

Education has long been recognised as a vital determinant of both personal life chances and broader economic and social performance.

Public schools play a critical role in ensuring access to educational opportunity for Australians from all economic and geographical communities.

Public schools are accessible to everyone. They provide a vital ‘public good’ service in ensuring universal access to the education that is essential for a healthy economy and society.

However, inadequate funding for public schools – measured by persistent failure to meet minimum resource standards established through the Schooling Resource Standard (SRS) – is preventing students in public schools from fulfilling their potential. Growing evidence (including the latest NAPLAN testing results) attests to declining student completion and achievement in Australia, with major and lasting consequences for students, their families and communities, and the economy.

In this new report, Centre for Future Work researchers Eliza Littleton, Fiona Macdonald, and Jim Stanford document the large economic and social benefits of stronger funding for public schools. The report measures three broad channels of benefits:

  1. The immediate economic footprint of public schools, including direct and indirect jobs in schools, the education supply chain, and downstream consumer industries.
  2. The labour market and productivity gains resulting from a more educated workforce.
  3. Social and fiscal benefits arising from the fact that school graduates tend to be healthier, require less support from public income programs, and are less likely to be engaged with the criminal justice system.

Citing international and Australian evidence regarding the scale of these three channels of benefit, the report estimates that funding public schools consistent with the SRS would ultimately generate ongoing economic and fiscal benefits two to four times larger than the incremental cost of additional funding. For governments, the fiscal payback from those benefits (via both enhanced revenues and fiscal savings on health, welfare, and criminal justice expenses) would exceed the upfront investments required in meeting the SRS.

Please see the full report, The Case for Investing in Public Schools: The Economic and Social Benefits of Public Schooling in Australia, by Eliza Littleton, Fiona Macdonald, and Jim Stanford.

Full report