Parental attitudes regarding the value of education may determine whether some, none or all school – aged children in a household are enrolled and how much formal education they will eventually complete. To the extent that attitudes are important and can be adequately measured, they should explain household demand for schooling in the absence of constraints. However, the attitudes which people express may be inconsistent with their behaviour when faced with schooling choices for their own children. If attitudes do not explain actual enrolment, the causes of this discrepancy must be addressed. This paper attempts to measure attitudes, explain their formation and investigate the role of attitudes in the allocation of human capital. Parental attitudes toward schooling are found generally to be favourable, and differences in attitudes help explain household enrolment decisions. However, attitudes alone cannot account for low enrolment in rural Ethiopia. High direct and opportunity costs of schooling also limit school participation in the face of credit constraints