Determinants of Household Education Expenditures: Do Poor Spend Less on Education?

Accumulation of human capital is proved to be crucial for economic growth and poverty alleviation. Education is counted as one of the basic services that allows individuals to gain better skills and knowledge which enhances economic growth and is also essential to combat poverty. Although investment in education is mostly financed by the government, most of the families privately contribute to their children’s education. Some of the researches argued that education expenditures depend on the income level of the households. From this point of view, private education can only be afforded by households who are at the higher income groups. Therefore, the focus of this study has twofold: One is to examine the determinants of education expenditure of Turkish households and the other is to reveal the impact of the different income groups on the education expenditures. Household Budget Survey (HBS) for the years 2002, 2010 and 2013 conducted by Turkish Statistic Institution (TurkStat) is utilized for Tobit model estimations. Findings show that higher Household income levels leads to higher educational expenditures. We also find that households with better human capital spend more on their children’s education. For 002, however, income elasticity of education expenditure is higher compare for poorer households compared to the richer ones, which means that poor are more sensitive to income changes with respect to education expenditures. We do not find this for the year 2013.