We review and critique the empirical literature on the links between investments in children and children's attainments. The primary theoretical perspectives that dominate this literature form the framework for our review. The potential effects on children of family choices and neighborhood characteristics are emphasized. The outcomes of interest include educational attainment, fertility choices, and work-related outcomes such as earnings and welfare recipiency. A set of tables provides details on the existing empirical literature. The focus is on the economics literature, but relevant studies from other social sciences are included as well.

According to the Easterlin hypothesis, the positive relationship between income and fertility is dependent on relative income. The hypothesis presumes that aspirations are significantly determined by family background. If income is high relative to aspirations, individuals will tend to have more children. The definition of variables as sibling differences controls family background and yields a measure of relative income. Analyzing the Kalamazoo Brothers sample in this fashion produces no evidence in support of the hypothesis.

Parents, courts, and legislatures have been struggling to define equal educational opportunity (minimum achievement level for all? minimum growth in achievement? differential growths in achievements?). At the same time, economists, sociologists, and educators have been struggling to identify which package of school inputs is required for each type of student to equip him or her for educational growth. Most empirical attempts to identify which inputs matter have concluded that schools barely make a difference. From this conclusion has flowed a prevailing nihilism with respect to schools as an egalitarian force. We conclude, on the basis of a microeconometric examination of Philadelphia School District data, 1) that many school inputs do matter, 2) that disadvantaged students can be helped by particular types of inputs, and 3) that the use of pupil-specific data, and statistical methods appropriate to such data, account for the cheerier results of this study. Little theory, economic or otherwise, is currently available to describe the determinants of educational achievement. Casual observation, combined with the education literature, suggests that achievement (A ) is a function of a student's hard-to-disentangle genetic endowment and socioeconomic status (GSES), teacher quality (TQ), non-teacher school quality (SQ), and peer group characteristics (PG). Thus,

Using 20 years of longitudinal data on nearly 900 girls aged 0 to 6 in 1968 (19 to 25 in 1987) from the University of Michigans Panel Study of Income Dynamics the authors measure the influence of family background individual characteristics economic resources (or the lack thereof) and the experience of particular disruptive family events on the probability that a teenager will give birth out of wedlock and subsequently apply for and receive welfare....Among the many findings of the investigators is that teenage daughters whose mothers have more education are less likely to give birth out of wedlock that teens whose mothers received welfare are more likely to give birth out of wedlock and receive welfare themselves and that teens who grew up in a home experiencing stressful events (e.g. parental separation geographic moves) are more likely to give birth out of wedlock. (EXCERPT)

Although there is a large literature on the effect of AFDC and Food Stamps on labor supply and welfare participation, there has been little work on the effects of Medicaid, despite its importance in the O.S. transfer system. In this paper we use 1986 data from the Survey of Income and Program Participation to examine the effect of Medicaid on the labor supply and welfare participation decisions of female heads of family. A key contribution is the development of a family-specific proxy for the valuation of Medicaid benefits which depends upon the health and other characteristics of the family. We find that Medicaid has strong and significant effects on labor supply and welfare participation that are negative and positive in sign, respectively, but which are concentrated in the tail of the distribution with the highest expected medical expenditures. We also find that the availability and level of private health insurance have very large effects opposite in sign to those of Medicaid.

tional attainments suggests the usefulness of special training programs for unskilled immigrants. Further, the persistence of racial differentials underscores the importance of the enforcement of anti-bias employment regulations to protect non-white immigrants. Recent changes in immigration law under the Refugee Act of 1980 will increase uncertainty regarding the composition of future immigration waves. It is likely, however, that the proportion of immigrants for whom specialized training and anti-bias regulation enforcement can hasten the traditional catch-up process which has historically characterized the immigrant economic experience will continually increase. Additional research using more recent data will allow both the efficacy of the recommendations advanced and the persistence of the observed patterns to be tested.