Genetic Endowments and Wealth Inequality

Daniel Barth, Nicholas Papageorge and Kevin Thom

Journal of Political Economy, 2020, vol. 128, issue 4, 1474 - 1522

Abstract: We show that genetic endowments linked to educational attainment strongly and robustly predict wealth at retirement. The estimated relationship is not fully explained by flexibly controlling for education and labor income. We therefore investigate a host of additional mechanisms that could account for the gene-wealth gradient, including inheritances, mortality, risk preferences, portfolio decisions, beliefs about the probabilities of macroeconomic events, and planning horizons. We provide evidence that genetic endowments related to human capital accumulation are associated with wealth not only through educational attainment and labor income but also through a facility with complex financial decision-making.

Date: 2020
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Related works:
Working Paper: Genetic Endowments and Wealth Inequality (2018)
Working Paper: Genetic Endowments and Wealth Inequality (2018)
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