Abstract: This report documents the differences in educational outcomes between rural, regional & remote Australia and urban Australia. The report then quantifies the economic impact of these disparities in educational outcomes. By linking education to human capital formation—one of the key components of economic output along with physical capital—we estimate the shortfall in Gross Domestic Product (GDP) due to these differences. If the human capital gap between urban and non-urban Australia was closed, Australia’s GDP could be increased by 3.3%, or $56 billion. To put this in perspective, this is larger than the contribution of the entire Australian tourism industry. Put another way, one would need to quadruple the size of the Australian beef industry to achieve the same economic improvement. Yet these are only the direct effects, on wages, of closing the human capital gap. There are important spillovers in addition to this, such as improvements in physical and mental health and enrichment of communities. We do not speculate about the size of these spillovers, but they are likely to be substantial. Furthermore, there is a multiplier effect throughout the economy from increased productivity and wages which we do not include. Thus, the size of the benefits we identify are in many ways quite conservative. Framing the magnitude of the potential benefits from closing this gap is an important first step to achieving these benefits for individuals, households, and the economy more broadly. Clearly, however, a sound understanding of which educational interventions work to close the gap is vital—as is determining which are the most cost effective. The report summarises work from randomised controlled trials overseas that point to which educational interventions are most promising in this respect. We also outline an approach—building on the concept of Social Return Accounting—to calculate the return on investment (or “Social Internal Rate of Return—SIRR”) of different interventions. Ultimately, careful and large-scale randomised controlled trials in Australia are a crucial step to determining which educational interventions yield the highest rates of return and can thus make the most significant contribution to closing the gap between urban and non-urban education in Australia.