Is Parental Love Colorblind? Allocation of Resources within Mixed-Race Families

Recent studies have shown that differences in wage-determinant skills between blacks and whites are likely to emerge during a child’s infancy. These findings highlight the role of parental investment decisions and suggest that differences in labor income tend to persist across generations, either because minority parents are limited in their choices, or because they have relatively negative expectations regarding the rewards attached to investments in skills. Exploring the genetics of skin-color determination and the widespread incidence of mixed-race families in Brazil, 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.