This paper aims to contribute to understand the mechanisms underlying the complex exclusion process of indigenous people in Peru, by analysing the role played by aspirations in the investment in education of indigenous children. To address these issues, the paper relies on a very rich data set, the Young Lives data, and uses an original instrument that allows to cast light on the causal relation between aspiration and educational outcomes. We find that aspiration failure is a channel of inequality persistence between indigenous and non-indigenous people, but that aspiration failure does not take the form of a lack of aspiration. Indigenous children do not have internalized racial schemas about occupation or about their opportunities. However, the gap between their aspiration and their current socio-economic status is too large, in so far as it has a disincentive effect on forward-looking
behaviour.

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