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Title: Essays on the Effect of Expectations about Future Opportunities on the Human Capital Development of Minority Children
Resulting in 1 citation.
1. Caldwell, Ronald C., Jr.
Essays on the Effect of Expectations about Future Opportunities on the Human Capital Development of Minority Children
Ph. D. Dissertation, University of Washington, June 2007
Cohort(s): Children of the NLSY79
Publisher: ProQuest Dissertations & Theses (PQDT)
Keyword(s): Achievement; Affirmative Action; Human Capital; Modeling, Fixed Effects; Parental Influences; Peabody Individual Achievement Test (PIAT- Math); Peabody Individual Achievement Test (PIAT- Reading); Racial Differences; Test Scores/Test theory/IRT

Permission to reprint the abstract has not been received from the publisher.

In two essays, I empirically examine the effects of a change in affirmative action policies on the human capital development of minority children relative to white children. My first essay analyzes how these policy changes impacted acquired ability, as measured by achievement test scores, for minority children of different ages. I utilize both difference-in-difference-in-difference and individual fixed effects methodologies to show that achievement test scores among thirteen and fourteen year old African-American children dropped significantly relative to whites after the policy changes. My second essay further analyzes the causes of these drops in test scores. Specifically, I investigate whether changes in parental and child investment variables occurred as a result of these policy changes, and whether these changes can explain the significant drops in minority test scores. These analyses utilize data from the Children of the National Longitudinal Survey of Youth 1979 cohort (CNLSY79). The results should help to further identify and explain the causes of the large acquired skill gaps that exist between minority and white children, and to therefore help inform policy aimed at eliminating these skill gaps.

I. The Effects of Affirmative Action Policies in University Admissions on Human Capital Development of Minority Children: a Test of the Expectations Hypothesis.
It has been well documented that minority children leave primary school with lower levels of acquired skill than do their white counterparts. The causes of this "skill gap", however, are not well understood. This paper attempts to analyze one possible cause: the impact of perceived labor market discrimination on the human capital development of minority children. Using the CNLSY79 data, I take advantage of recent changes in affirmative action laws regarding university admissions in California and Texas as a natural experiment. I employ both difference-in-difference-in-difference and individual fixed effects methodologies to test for changes in achievement test scores among minority children between the ages of 7 and 14. The results show a significant drop in test scores among thirteen and fourteen year old African-Americans in the affected states relative to whites, but no significant impact among Hispanics. Younger age groups show negative, but insignificant effects. These results suggest that expectations do play a role in the human capital investment of minority children and further research in this area is warranted.

II. The Effect of Expectations about Future Opportunities on Human Capital Investment by Minority Parents and Children.
Given the large skill gaps that exist between minority and white children, and the degree to which these skill gaps are correlated with labor markets outcomes, it is important to understand why these skill gaps exist. Of particular concern is the fact that these skill gaps are present in children prior to entering kindergarten. In this paper, I analyze the impact of racially disparate future expectations among minority parents and children on their human capital investment decisions. A labor-leisure choice model is used to show that a perceived difference in future opportunities for minority children relative to whites should result in a reduction of human capital investment. This model is tested using changes in affirmative action laws to determine if parental and child human capital investments are affected by the changes in the policy. This paper utilizes the CNLSY79 data, which contain a number of parent and child input variables that are highly correlated with achievement test scores. The empirical results will be used to determine if the significant drops in minority test scores found in chapter one can be explained by changes in parental or child behavior. Additionally, these results will provide evidence on whether parental responses to negative expectations can be considered a plausible explanation for the large skill gaps that exist at very young ages.

Bibliography Citation
Caldwell, Ronald C., Jr. Essays on the Effect of Expectations about Future Opportunities on the Human Capital Development of Minority Children. Ph. D. Dissertation, University of Washington, June 2007.