For many children, the circumstances of their birth and earliest years have lifelong consequences. Where and to whom a child is born can predict her economic and social outcomes later in life. Children born to parents who invest emotional and economic resources in their development tend to become healthy and productive adults, passing on the advantages that such investments bring to their own children. Children born in adverse circumstances, where poverty and stress limit possibilities and aspirations, fare less well. The odds are stacked against them from the beginning.

In the last decades, countries in Latin America and the Caribbean have experienced a dramatic increase in the levels of higher education enrollment. Using administrative data from Chile and Colombia, we find that this phenomenon is not always associated with higher private individual returns. In both countries, there is a significant dispersion in the net returns to higher education and a significant proportion of graduates could be facing negative returns.