Relationship Between School Funding and Educational Outcomes Across Australian School Sectors: Evidence from Panel Data

This study examines the impact of government school funding on Year 7 outcomes in Numeracy, Reading, Spelling, and Writing across Australian school sectors from 2009 to 2022. Using panel data analysis, the results show that increases in government recurrent funding are positively associated with Numeracy outcomes in Catholic and Independent schools, Reading in Independent schools, and Writing in Government schools, although the estimated effects are modest. Across all sectors, improvements in the index of community socio-educational advantage are strongly linked to better educational outcomes. The analysis finds that the introduction of the Gonski funding reforms in 2011 was associated with improved Numeracy, Reading, and Spelling outcomes for Catholic and Independent schools, and improved Spelling for Government schools. In contrast, the COVID-19 pandemic had a significant negative effect on student achievement across all sectors. Overall, the findings highlight the roles of funding, socio-economic conditions, and policy interventions in shaping educational outcomes.