The Burden of Education Costs in China: A Struggle for All, but Heavier for Lower-Income Families

Abstract

This study examines the level and equity of household education spending in China using representative microdata. The findings reveal that education expenditure constitutes a substantial portion of household income, averaging around 17.1%. Moreover, there is an inverse relationship between household income and the fraction of income spent on education, with the top quartile spending 10.6% of their income on education, while the bottom quartile spends a staggering 56.8%. Regression analysis indicates an income elasticity of 0.306, implying that education is a necessity good in China. These results underscore the excessive financial burden imposed by education expenditure, particularly on families in the lower income bracket. To promote equal opportunities and achieve broad, long-term economic benefits, it is imperative to implement new public policies in China that improve the affordability of education for a broader segment of the population.

Keywords: Education Expenditure; Inequality; China