Education policy is viewed as affecting the content, and hence production functions, of different types of training and skill-formation. The relationship between skill type and level of education is considered. Optimal investment requires equating rates of return on the extensive and intensive margins, making endogenous the trade-offs between quantity and quality for each skill type. Selected education production functions are discussed with respect to implications for the distribution and levels of different skills and for skill-related earnings differentials. Equality of educational opportunity increases skill levels, upgrades the occupational structure and reduces relative earnings differentials.