Using the data of Social Change Survey in Taiwan 1994-1995, this paper explores the effects of family background and education on earning differentials between Aborigines and Han groups. The earning determination model included human capital and status attainment variables. Descriptive analyses shows that the family socio economic status, educational attainment, and occupation prestige of Aborigines is significantly lower that of Han groups. Regression analysis shows that education is main factor in explaining earning determination of Aborigines. Education, occupational status and age are statistically significant in explaining the earning determination of Han groups. The effects of family backgrounds on earning determination of Han groups are mainly through the education and occupation status, The results of a decomposition analysis indicate that both human capital theory and status attainment model play influential factors in accounting for ethnic differentials.