Does money matter? An examination of government funding, school sectors, and student achievement

The achievement gap between advantaged and disadvantaged students in Australia is one of the largest in the OECD. Due to the litany of negative consequences arising from educational inequality, research has begun to look for policy interventions to improve the educational outcomes of disadvantaged students. A growing body of evidence suggests that modifying school funding policies to better assist disadvantaged students may be one potential solution. This research aims to provide the first systematic analysis of the impact of school funding upon student achievement in Australia. It proposes that government funding has a significant positive effect upon student achievement across all school sectors. Additionally, it proposes that funding has a differential effect upon student achievement based upon school sector and student year-level. 

The data used in this research was collected by the Australian Curriculum, Assessment and Reporting Authority (ACARA) from 2009-2016, and details school-level financial records and student achievement results for every primary school in Australia. This research finds that government funding has a significant positive impact upon student achievement in Australia in Years 3 and 5. It also finds that independent schools derive a greater increase in student achievement for every dollar spent than schools in the catholic or government sectors, and that government funding has a greater positive effect upon students in Year 3 than in Year 5. Analysis of funding trends also demonstrates that government funding to the independent and catholic sectors has risen substantially faster than government funding to the government sector. Given the lower achievement of the government sector and the reduced impact of every dollar of funding it receives compared to the independent sector, this research concludes that current government funding policies are exacerbating the achievement gap and reinforcing educational inequality in Australia. To reduce the achievement gap in Australia, funding should be redirected from the independent sector to the government sector.