Using National Longitudinal Survey of Youth data, this study finds that education rates of return vary across racial/ethnic groups because of differing human capital investments made by families in each group. School quality also matters. Nearly the entire white/black earnings gap would disappear if black children had school and home…

Including family background variables in the wage equation significantly decreases estimated returns to a worker's own schooling. Using data on family members' schooling, this paper identifies family background's substantial effects on returns to schooling in Taiwan. The father's schooling is more important than the mother's in explaining wage…