Genetic Endowments and Wealth Inequality

Daniel Barth, Nicholas Papageorge and Kevin Thom

No 24642, NBER Working Papers from National Bureau of Economic Research, Inc

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 help to explain the gene-wealth gradient, including inheritances, mortality, savings, risk preferences, portfolio decisions, beliefs about the probabilities of macroeconomic events, and planning horizons. The associations we report provide preliminary 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. Our study illustrates how economic research seeking to understand sources of inequality can benefit from recent advances in behavioral genetics linking specific observed genetic endowments to economic outcomes.

JEL-codes: D14 D31 G11 H55 I24 J24 (search for similar items in EconPapers)
Date: 2018-05
Note: AG
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Citations: View citations in EconPapers (18)

Published as Daniel Barth & Nicholas W. Papageorge & Kevin Thom, 2020. "Genetic Endowments and Wealth Inequality," Journal of Political Economy, vol 128(4), pages 1474-1522.

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Working Paper: Genetic Endowments and Wealth Inequality (2018)
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