In this article, the authors examine educational stratification in Taiwan against the background of an ethnically based political economy. They investigate how educational attainment is related to ethnicity and other background factors, such as parental class and education, and if these relationships changed over time as Taiwan became a more industrial and democratic society. The findings reveal that while children from Mainlander families are overall more likely to achieve higher levels of education and make the crucial transition of graduating from secondary schools, this ethnic effect does not hold when parental class and education are taken into account. Parental class and education do matter, although they have diminished in importance over time. The authors relate these findings to theories of the relationship between industrialization and educational attainment.