Abstract: Using national data from 2017 CIEFR-HS, we first examine the full cost of household expenditure on children’s education and the structure of in-school and out-of-school education expenditure. Second, we take advantage of the detailed information about household education expenditures, including those that occurred within and outside schools, to examine how families’ marginal propensity to spend on education-related items and activities varies across household income, mother’s education level, and residency groups. On average, families spend over 10000 yuan on education per student per academic year, covering about 16% of annual household consumption. About one-third of the household spending on education is spent outside school. The analysis of the marginal propensity to spend on education shows that families with higher income, families with better educated mothers, families with only one girl, and families with urban hukou tend to increase their spending on education when the total household consumption increases, especially on in-school developmental spending and private supplementary education. In conclusion, the level and structure of in-school and out-of-school spending for children from different families have become more stratified.

Key words: basic education, household spending on children, supplementary education, marginal propensity to spend