Resources and outcomes

Human capital theory and broad generalities about market reform are of little use in the day-to-day provision of education. A more promising economic theory is input–output modelling, which looks at the relationship between the resources devoted to education and the outcomes of education. It is unfortunate that some economists have made strenuous efforts to deny that there is a positive relationship between resources and educational outcomes. This chapter looks at the relationship between resources and outcomes (particularly in relation to class sizes), and examines trends in Australian spending on education.