The Correlation of Expenditure on School Level and Students’ Academic Performance: Based on the Empirical Study in Western Poor Rural China

As a means to alleviate poverty, the Chinese government has been investing in education by increasing financial resources for schools. However, scholarship on the relationship between school re- sources and student academic performance has not reached a consensus. This study examines the relationship between school-level expenditures, a key aspect of school resources, and student academic performance. Using data collected in 94 rural primary school in designated poverty areas of western rural China, the empirical study found that school expenditures on students and teachers account for only 12% of total expenditures, while expenditures on school administration is as high as 72%. Expenditures on students and teachers (software) are positively correlated with student academic performance. However, expenditures on school administration (hardware) were negatively correlated with academic performance. These findings have strong implications for the structure of school spending and rural education.