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Heritability of Lifetime Income

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  • Hyytinen, Ari
  • Ilmakunnas, Pekka
  • Johansson, Edvard
  • Toivanen, Otto

Abstract

Using 15 years of data on Finnish twins, we find that 24% (54%) of the variance of women’s (men’s) lifetime income is due to genetic factors and that the contribution of the shared environment is negligible. We link these figures to policy by showing that controlling for education reduces the variance share of genetics by 5-8 percentage points; by demonstrating that income uncertainty has a genetic component half the size of its variance share in lifetime income; and by exploring how the genetic heritability of lifetime income is related to the macroeconomic environment, as measured by GDP growth and the Gini-coefficient of income inequality.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 46326.

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Date of creation: Apr 2013
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Handle: RePEc:pra:mprapa:46326

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Keywords: permanent income; income uncertainty; heritability; twins; genetics;

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