What parents do for children "matters"-or so it is assumed. Much of the literature on social inequality at the individual or household level in the United States has focused on the role that families play in (re)producing inequality. For example, in the late 1960s and 1970s, the most studied topic in U.S. social stratification was intergenerational occupational mobility (Blau and Duncan 1967; Duncan, Featherman, and Duncan 1972; Jencks 1972). This tradition of research in sociology has had parallel streams within economics (see, for example, Robert Haveman and Barbara Wolfe's 1994 book Succeeding Generations). The continued focus on mechanisms through which parents monitor children's educational progress and risk-taking behavior and ensure their adult success is also manifest in the large and influential literature on the supposed harmful effects of growing up in a single-parent family. In the past decade many studies have tried to improve our understanding of what constitutes "successful parenting" and the costs that accrue when the conditions of parenting (for example, poverty or single-parenting or both) are less than optimal for producing salutary child outcomes; examples include Sara McLanahan and Gary Sandefur's widely cited 1994 book Growing up in a Single-Parent Family: What Hurts? What Helps? and Susan Mayer's 1997 book What Money Can't Buy: Family Income and Children's Life Chances. Beginning with the early work of James Coleman, an extensive literature developed on education that asked whether schools make a difference. The backdrop for these studies, however, was always implicitly family investment: Does the quality of schools add to the likelihood of later life success, or is variation in student performance largely determined within the family (either through genetic endowment or differential family investments or both in combination)? Recently, the importance of peer influences as determinants of child outcomes have captured the attention of researchers. Yet again, the backdrop remains the relative influence of these factors compared with genetic endowment, family factors, and parenting behaviors that help ensure children's well-being. The common theme in the large literature on the role of parents in determining children's success and well-being is that inequality in material and other investments that parents make in child-rearing may be one of the "keys" to predicting the inequality in the success of the next generation. Our subject in this chapter is the inequality in investment that occurs by socioeconomic level of the parents, focusing on the variation by college education. Several changes in U.S. society since the 1970s lead us to speculate that differentials in parents' ability to bestow resources on their children may be widening in recent years. First, as the wage gap between college-educated and less-educated workers widened in the 1980s and 1990s, income growth for children living in families with a college-educated parent outpaced that of children whose parent had less than a college degree. The family income distribution for children became more unequal after 1973. The Gini index for the income of children's families increased from 0.356 to 0.470 between 1973 and 1996 (Levy 1998, 164). Second, the growth in single-parent families shifted many children living only with their mother to the bottom of the income distribution (Cancian and Reed 1999; Chevan and Stokes 2000; Karoly and Burtless 1995; Levy 1998), and the prevalence of single-parenthood has been greater for less-than-college-educated men and women than for those with a college education. It is hypothesized that the decline in men's economic ability to support a family, combined with the availability of public assistance, has eroded the benefits of marriage among less-than-college-educated men and women (Becker 1981; Becker, Landes, and Michael 1977; Murray 1984; Oppenheimer 2000; Wilson 1987, 1996). Finally, there has been a dramatic increase in the employment of married mothers who responded to increased educational and labor force opportunities in recent decades, and that increase has been especially pronounced among more-educated women (Cohen and Bianchi 1999; Juhn, Murphy, and Pierce 1993). More and more children reside in two-parent families where both parents are employed. Wives' employment reached 80 percent for married-couple families in the top income quintile in 1996, up from 32 percent in 1949 (Levy 1998, table 2.4). Although families at all income levels experienced an increase in wives' employment, the increase is greater for highly educated women than for less-educated women. Moreover, high rates of marital homogamy by educational attainment have also been increasing (see Kalmijn 1991; Mare 1995). Thus, well-educated, dual-earner, two-parent families now typify families at the top of the family income distribution. Children with college-educated parents seem to be in a better position economically compared with children whose parents are not collegeeducated. As college-educated parents' family income rose relative to that of less-educated parents, the better-educated parents may have also become better able to make large financial investments in their children. In this chapter, we examine three major ways in which parents invest in their children. First, we focus on child-oriented expenditures. If, as Frank Levy (1998) argues, the family income of children's families by level of parents' education became more unequal, other things being equal, it would follow that expenditures targeted toward children should also have become more unequal. This implies that child-related purchases have increased or decreased at the same rate at which family income has increased or decreased. However, it may well be that parents protect monetary provisions for their children relative to other household expenditures. If this is the case, we would expect such expenditures to be inelastic relative to changes in income over time. By analyzing direct expenditures on children, we can ascertain whether increased income inequality has substantially increased the dispersion of material investments in children. Second, parents engage in an array of activities with their children that are aimed at promoting the health and well-being of their offspring. Mothers in higher-income households used to stay at home, at least when their children were young, and early time diary studies suggested that highly educated mothers did more enriching activities with their children than less-educated mothers (Leibowitz 1974; Hill and Stafford 1985). The increase in employment among college-educated mothers and the increase in family income for those with a college education suggest two countervailing possibilities in trends in the inequality in parental time investment in children. On the one hand, there may be growing similarity in maternal time investments in child-rearing across the income distribution as employment rates rise among highly educated, married mothers. Moreover, because of the increase in family income, highly educated parents may have encountered disincentives to use parental care for their children because the opportunity costs of time spent parenting, primarily mothers' time, have increased (Becker 1981). On the other hand, if parents wish to spend time with their children regardless of their level of education and family income, then it may be easier for well-educated parents than for less-educated parents to protect time for their children from the demands of paid work because they may have higher status, more flexible jobs, and a greater ability to purchase housekeeping services, prepared meals, and other services that reduce housework other than child care. How these countervailing tendencies have affected overall parental time with children is not immediately obvious, nor is it clear, without empirical investigation, whether these changes served to heighten socioeconomic differences in parental time with children, lessen them, or leave them unchanged. Finally, from the point of view of children, having healthy parents is an important advantage. Although the link between parental health behaviors and child outcomes is not as direct as that between the time and money spent on children and child outcomes, staying healthy and maintaining a healthy lifestyle is an indirect but important "investment" that parents can make in their children to enhance their children's life chances (see Zill 1999, 2000).