ABSTRACT
Investments in the schooling of family members beyond what is required by law and custom are made on the presumption that future returns from labor market participation will justify the expenditure. The premise is that labor productivity and therefore the wages that employers can afford and will be willing to pay a worker is directly linked to the level of schooling that has been satisfactorily completed. Once formal schooling is finished, productivity is further improved by on-the-job training and experience. Examination of the occupational wage structure in the preceding chapter established that, in the aggregate, the age–education profiles of the population indisputably reflect a positive relationship between additional years of schooling and higher levels of income. Higher levels of education are associated with higher labor-force participation rates, and workers with more education tend to be employed in better-paying occupations. Thus, the presumption is that schooling is invariably the link between productivity and earnings. This is, however, a presumption that is not universally relevant, for the incontrovertible evidence of ongoing gender and racial inequality suggests otherwise.
