"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 Hispanics, 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."
excerpt