THE INFLUENCE OF FAMILY BACKGROUND TOWARDS CHILDREN'S WAGES AND RETURNS TO SCHOOLING

This article aims at analysing the effect of family's background on returns to schooling among the children. The analysis is based on 1,192 working children who are still living with their parents. Data are obtained through a field survey in 2011 on 3,885 households using a set of questionnaire. The study employs Mincer's schooling model (1974) where children's monthly wages are used as dependent variable and the mother's/father's educational attainment, parent's income and working children's demographic factors such as gender, ethnicity and marital status are used as independent variables. Results of the study show that father's education level and parent's income provide a positive and significant affect on children's monthly wages. Male workers and married workers receive higher wages compared to female and unmarried workers respectively, while the Malay workers receive lower wages than the other races. Further, the results of the study demonstrate that mother's years of schooling significantly affect children's returns to schooling.