The linkages between education and poverty can be considered in two ways
(Oxaal, 1997). First, education can be used as a poverty reduction strategy to enhance
skills and productivity among poor households. Most of the research evidence has
confirmed that households with a higher level of education are less likely to be poor
(Bonal, 2007; Cremin and Nakabugo, 2012; Gounder and Xing, 2012). Second, poverty
is a constraint to educational achievement. The Millennium Development Goals Report
2010 argued that the biggest obstacle to education is poverty. In addition, the report
showed that the poorest 20 percent of the households have the least chance of getting an
education. They are 3.5 times more likely to be out of school than the richest 20 percent
of the households (United Nations, 2010). Brown (2003) analyzed decision-making and
education within resource-constrained households in rural China. He argued that
children from households that are poor and credit constrained were much more likely to
drop out of school. Therefore, the lack of credit is a major obstacle to financing
educational investments for some of the poor.