The Effects of University Affirmative Action Policies on the Human Capital Development of Minority Children: Do Expectations Matter?

Research shows that minority children enter the labor market with lower levels of acquired skill than their white counterparts. The causes of this skill gap, however, are not entirely understood. This paper analyzes one possible cause: the impact of a perceived lack of future opportunities on the human capital investment decisions of minority children and parents. Using NLSY79 data, I take advantage of changes in affirmative action laws regarding university admissions as a natural experiment. I test for changes in a variety of child and parental human capital investment variables such as time spent studying and parental involvement for children below the age of 15. The results show that time spent studying among 7th and 8th grade blacks in the affected states is significantly lower. The results for parental input variables show a fairly consistent negative trend among black parents of younger children. Additionally, cognitive achievement tests are examined and show significant results among the same age groups.