Religious divide costs Pounds 35m
The additional money is the result of the high level of religious segregation in the province, the bipartite system of grammar and secondary schools based on selection at age 11 and a complex administrative structure, according to the investigation by the NI Economic Council.
Though educational attainment in the province has risen sharply in recent years, the report said there remain "disturbing" differences in performance between Protestant and Catholics, girls and boys, and middle-class and working-class children which may imply a need to reallocate resources.
The number of Protestant children leaving schools with one or more A levels consistently exceeds the figure for the Catholic community which also has a higher proportion who leave with no qualifications.
The report also points to research showing boys lag behind girls in attainment at GCSE, and that middle-class children are 2.6 times more likely to attend grammar schools than their working-class counterparts.
It has called for the replacement of the selection system; a single administrative agency for all schools and colleges in the province, and the provision of non-denominational nursery education, starting in areas with the highest levels of socio-economic deprivation.