View article

This chapter reviews recent advances in the empirical literature on the role that households and families play in investing in human resources. It describes the estimation of reduced form demands for human capital, particularly education and health. Special attention is paid to the measurement and interpretation of the impact of household resources, particularly parental education, income, and impact of community resources, namely—prices and infrastructure. The process underlying the production of human capital is discussed. The chapter also discusses the difficulties in measuring inputs and input quality, and associated issues of estimation and interpretation. The chapter focuses on evidence regarding the influence of family background, school quality, ability, and self-selection. Models of household behavior in a dynamic setting are reviewed. The chapter discusses extensions to the model …