Education is widely accepted as the main backbone of growth and development of individuals and the nation. However, its achievement continues to elude many who are poverty stricken. Government of Kenya introduced free primary education in 2003 and tuition free secondary education in 2008. It is estimated that about 3 millions children are not enrolled in primary schools. For the children who enrolled in grade one, only between 46-48% can manage to complete the final grade and transition rate remained below 50%. The study was envisaged to look at interdependence between education and households’ poverty levels and its influence in internal efficiency of primary schools in Kenya. Descriptive research method which primary concerns with the present, past events and influences as they relate to the current conditions was employed .The study used survey research design. The sample size of the study was 468 respondents, comprising 360 household heads, 12 head teachers and 96 class teachers. Simple random and purposive sampling design was used. Four instruments were developed and used to collect data: Questionnaires for the households’ heads and class teachers, school data form and interviews. Data were analyzed with the help of SPSS computer programme (11.5). Household poverty levels were determined by use of poverty indexes developed by Greer and Thorbecke (1986). National poverty line of Kenya shillings (Ksh) 1562 developed by the government of Kenya in 2005/06 was adopted. Schools internal efficiency was determine with the help of educational statistical indicators developed by United Nations Educational, Scientific and Cultural Organization (UNESCO) (2009). Further to establish the relationship and test the hypotheses statistically, Pearson product moment correlation test was adopted. Findings of the study were presented by use of tables and figures. The study revealed that Kwanza district had 43.3 % of the households living above the poverty line, and 56.7 % of them operating below the poverty line. In the period 2004-2009 the dropout rate in Kwanza district schools ranged from 6.3 to 25.6%. The study also revealed that household’s poverty level had a significant relationship with majority of the school internal efficiency measures which included repetition, dropout, survival rate, cohort wastage, academic achievement and transition rate. The study implication among others was that the government should take the key responsibility of preparing data base of the poor families in the district and develop a credit cum-subsidy scheme that will provide financial support in terms of loans to the disadvantage group.
Key words: Education, development, poverty.
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