This brief summarises a comprehensive review of research studies in the United States on the relationship between school funding and student achievement. Its finding is conclusive: money matters. While the review is of studies conducted on the relationship between funding and student outcomes in K-12 schools in the United States, its key findings have immediate relevance to the state of school funding and student outcomes in Australia. 

Public schools have long been under-funded despite enrolling the vast majority of disadvantaged students. Full funding of public schools is necessary to make progress in reducing the proportion of disadvantaged students not achieving national proficiency standards and to reduce the huge achievement gaps between rich and poor.

Key findings

• Increased funding for schools yields improvements in test scores, school completion, tertiary attainment, lifetime earnings, and other outcomes.
• Spending on both current operations and capital investment increase student outcomes.
• The benefits are particularly strong for economically disadvantaged students and districts where states have historically underinvested.