Is Parental Love Colorblind? Allocation of Resources within Mixed Families

Marcos A. Rangel, University of Chicago

Studies have shown that differences in wage-determinant skills between blacks and whites emerge during a child’s infancy, highlighting the roles of parental characteristics and investment decisions. Exploring the genetics of skin-color and models of intrahousehold allocations, I present evidence that, controlling for observed and unobserved parental characteristics, light-skinned children are more likely to receive investments in formal education than their dark-skinned siblings. Even though not denying the importance of borrowing constraints (or other ancestry effects), this suggests that parental expectations regarding differences in the return to human capital investments may play an independent role on the persistence of earnings differentials.