This new research report, authored by Dr Lisa Heap and Dr Jim Stanford, shows that capital investment in public schools has a big educational and economic payoff.
Capital Works shows the benefits of increased investment in capital infrastructure include those arising from the construction of infrastructure, and those from increases in student school completion rates resulting in higher productivity of workers who have completed high school education.
Overall, the report concludes that a sustained $1 billion increase in public school capital funding would increase school completion rates; this increased school completion would ultimately generate between $3.5 billion and $7.3 billion per year in GDP benefits.
The key findings of the report include:
- Better school buildings improve student outcomes
International research strongly shows that investing in school buildings, facilities and equipment improves student results, which brings real economic and social benefits.
- Learning environments matter
Students do better academically when their physical surroundings improve, especially when the spending goes on air quality, classroom design and the condition of facilities.
- Disadvantaged areas benefit most
Some evidence suggests that infrastructure investment has a bigger impact in lower socio-economic areas.
- Construction creates jobs and growth
Every $1 billion spent on school construction supports more than 2,500 jobs, adds $1.1 billion to GDP and generates $277 million a year in extra wages.
- More students finish school
Permanently increasing school infrastructure funding by $1 billion a year would lift school completion rates by 1.36 percentage points. The cumulative impact would raise total wages by just over $1 billion a year and add $2.2 billion a year to GDP, because workers who finish school are more productive. It would also deliver social and budget savings of $0.25–4 billion a year.
- The total benefit is several times the cost
Overall, every extra $1 billion a year would eventually add $3.5–7.3 billion a year to GDP, with benefits shared across construction, local businesses, workers and government budgets.
This research shows spending on public school capital infrastructure is very much an investment for government, not a cost. Australia can afford this investment as it will pay off in economic and fiscal terms, as well as human and social terms.