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Household expenditures on education and the relative poverty in China

Author

Listed:
  • Jiao, Xuyang
  • Wang, Xinjian
  • Zhang, Jiang

Abstract

While China has made remarkable progress in absolute poverty reduction, relative poverty remains a significant challenge, particularly regarding the role of household investment decisions. Previous studies have primarily focused on macro-level education policies and poverty alleviation, overlooking how household-level education spending influences relative poverty status. This study examines the relationship between household education expenditure and relative poverty in China, considering the mediating role of family size. Using data from the China Family Panel Studies (CFPS) 2020 and employing multiple regression approaches, we find that higher education expenditure significantly reduces the likelihood of relative poverty, with the strongest effects in less developed Western regions. The number of children partially mediates this relationship, suggesting a quantity-quality trade-off in family investment decisions. These findings advance our understanding of household-level mechanisms in poverty reduction and suggest targeted education investment policies that consider regional heterogeneity and family demographics.

Suggested Citation

  • Jiao, Xuyang & Wang, Xinjian & Zhang, Jiang, 2025. "Household expenditures on education and the relative poverty in China," Finance Research Letters, Elsevier, vol. 72(C).
    • Handle: RePEc:eee:finlet:v:72:y:2025:i:c:s1544612324015058
    DOI: 10.1016/j.frl.2024.106476
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    References listed on IDEAS

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    More about this item

    Keywords

    Education investment; Relative poverty; Family size; Regional inequality; Household economics;
    All these keywords.

    JEL classification:

    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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