JEL Classification：A20 I25 I28 O53

1 Introduction

Education is a major expense for many families in rural China. Research has shown that a very significant percentage of family income is devoted towards the education of children. Parents devote 46% of family income towards secondary school expenses，51% on high school expenses and 52% on university expenses for their children （Dong & Wan，2012）.

Educational expenses since 2000 have dramatically increased and made it very difficult for Chinese families to afford higher education for their children. Unauthorized charges by Chinese schools have amounted to RMB ¥200 billion （US$32 billion） in the last decade. Students must now pay RMB ¥10，000 （US$1，600） in various university fees （compared to only RMB ¥200 （US$32） in the late 1980s（Dong & Wang，2012）. Researchers in 2003 found it cost around RMB ¥250，000 （US$40，270） to raise a child from birth until the age of 16. If a child went to a university the total cost was driven up by RMB ¥140，000 （US$22，500） （Dong & Wan，2012）. After graduation from college，parents also spent another RMB ¥100，000 （US$16，100） on helping their children afford housing and wedding expenditures. Overall，the average Chinese parent will spend 40% to 50% of their total income raising their child.

Why have educational expenses risen so dramatically in the last decade？ The commercialization of education by schools has resulted in significant increases in tuitions and fees. Even public schools now charge students several hundred RMB Yuan （US$50） to attend elementary and middle schools classes. Dong& Wan （2012） found that 20% of students in 40 schools from 10 cities paid sponsorship and school selection fees for classes. Salarie