On the Origins of Socio-Economic Inequalities: Evidence from Twin Families

Paul Bingley (), Lorenzo Cappellari and Konstantinos Tatsiramos
Additional contact information
Paul Bingley: VIVE - The Danish Centre for Applied Social Science

No 16520, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We propose a twin family model linking twins with their spouses and children to quantify the relative importance of genetic and environmental factors in explaining the variance of socio-economic outcomes. Using data from the Danish Twins Registry and population registers, we test and relax the assumptions of the standard behavioral genetics model most frequently applied in economics using twins or adoptees. Exploiting an education reform differentially affecting parents, we find no evidence of gene-environment interactions. While we find some assortative mating based on genetic factors, differentially shared environments are key: they explain half of the variance in years of schooling, whereas genetic factors explain only nine percent. We find similar percentages for earnings, income, and wealth. Decomposing intergenerational elasticities reveals that shared environments explain 50% for earnings, 60% for income, 70% for wealth, and 80% for schooling. Family environments are more important than previously understood.

Keywords: nature; nurture; family background; genes; environment; inequality (search for similar items in EconPapers)
JEL-codes: D31 D63 E21 E24 I24 (search for similar items in EconPapers)
Pages: 53 pages
Date: 2023-10
New Economics Papers: this item is included in nep-eur and nep-ltv
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://docs.iza.org/dp16520.pdf (application/pdf)

Related works:
Working Paper: On the Origins of Socioeconomic Inequalities: Evidence from Twin Families (2024)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp16520

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().