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Using information collected from the Nepal Living Standards Survey (NLSS) 2010-11, this study shows that in Nepal, relatively rich, more educated and urban parents are more likely to send their children to private schools and hire tutors for private tuition. Thus, they spend more on children education. In contrast, economically lagging, less educated, backward caste and rural households mostly send their children to public schools, where the public funding per pupil is going down. They are also less likely to hire private tutors and thereby spend less on their children's education. It indicates the presence of a deep inequality in terms of access to education resources among the Nepalese citizen. This resource gap increases school segregation between rich and poor, castes, and urban and rural students, and is likely to result in greater inequality of school performance, although whether this occurs through higher value added in private schools or through more money spent on private tuition and education, is unclear.

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