Travelling bush tutors and rewards for student effort could help close the $50 billion education gap between urban and regional areas, a new report has found.

The report, led by UNSW economics professor Richard Holden, found Australia would add up to $53 billion to its annual GDP if it invested in the education of kids in rural and regional areas.

The Economic Impact of Improving Regional, Rural and Remote Education in Australia, the first research to be released by the Gonski Institute for Education, said there would be a big return on modest investment in regional schooling.

Closing the gap between urban and regional students would add more than $50 billion to GDP. Credit:Kay Collett

"Compared to some proposals for regional development, the education gap is particularly large and offers a high return on investment," the report said. "[In comparison], proposals such as the recent 'inland rail project' may not even cover their costs."