IMPACT OF CHILD QUALITY ON EARNINGS: THE PRODUCTIVITY‐OF‐SCHOOLING HYPOTHESIS

Philip Ganderton and Griffin Peter

Contemporary Economic Policy, 1993, vol. 11, issue 3, 39-47

Abstract: This paper investigates the relationship between average earnings, education (measured by years of schooling), and rates of return to education for major racial/ethnic groups in the United States. It considers the effect of including previously omitted “productivity‐of‐schooling” (also referred to here as “child quality”) variables. An upward‐sloping average education, rate‐of‐return‐to‐education profile exists for His‐panics, blacks, and whites. Productivity‐of‐schooling (i.e., child quality) measures– including family size, family composition, ability, and parental inputs–significantly affect earnings and rates of return to education. The results here are consistent with Chiswick (1988). Conditions within the family play a larger role in determining the value of education for minority males than for white males, a conclusion of obvious interest to policymakers.

Date: 1993
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