ABSTRACT
 Education being the key to socio-economic development of any nation has prompted the
 government of Kenya to subsidize secondary school education, as a way of ensuring
 maximum students‟ participation. However, there is growing concern that this initiative
 may not be yielding the expected outcome, as is evident from the current relatively low
 transition and completion rates. Unexpectedly so, the country continues to record surging
 numbers of school drop outs since the subsidization programme was first rolled out. The
 study sought to establish the relationship between subsidized school funding and
 students‟ participation in public secondary schools. Specifically, the study investigated
 the trends in enrolment rates and subsidized school funding by school category, evaluated
 the relationship between subsidized school funding and textbook to student ratio,
 analyzed the association between subsidized school funding and transition rates from
 public primary to secondary school and assessed the relationship between subsidized
 school funding and completion rates in public secondary schools in Vihiga County. The
 study was based on the Von Thunen‟s Production Function Theory, which postulates a
 linear relationship between educational inputs and outputs. The study was implemented
 using the descriptive survey research design and targeted the 5 Sub-County Directors of
 Education, 5175 form three students, 115 principals and 1023 teachers, all drawn from
 the 115 public secondary schools in the research area. A sample of 518 form three
 students, 102 teachers, 12 principals and 5 Sub-County Directors of Education was
 selected by saturated sampling for the directors, simple random sampling for the
 Principals, then purposive sampling for the students and teachers. Data were collected
 using questionnaires, interview schedules and document analysis guides. Piloting was
 conducted three weeks to the actual study in 5 secondary schools in the research area, to
 assess the suitability of these instruments for collecting the required data. Validity of the
 research instruments was assessed using data from the pilot study, via the Rasch model,
 while their reliability was assessed at the same stage using the test-retest method. Both
 measures were found to meet the minimum threshold as stipulated by various educational
 research experts with respect to the research instruments that were developed by the
 researcher. Data were analyzed by use of descriptive and inferential statistics thus;
 frequency counts, means and percentages. Pearson‟s Product Moment Correlation
 Coefficient was used to test the null hypotheses at the 0.05 alpha level of statistical
 significance. Findings revealed that there was a steady rise in the average number of
 students enrolled in form one in boarding schools as compared to those who enrolled in
 day schools. Moreover, the study established that a significant positive relationship
 exists between subsidized school funding and completion rates. However, a there was no
 significant association between subsidized school funding and both student to text book
 ratio and primary to school transition rates. It was concluded an increase in the funds
 allocated towards subsidizing secondary school education would significantly improve
 students‟ participation. It is therefore recommended that the government of Kenya should
 allocate more funds towards subsidization of secondary education, so as to increase
 students‟ participation in all Kenyan public secondary schools.