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The Nurture of Nature and the Nature of Nurture: How Genes and Investments Interact in the Formation of Skills

Author

Listed:
  • Mikkel Aagaard Houmark
  • Victor Ronda
  • Michael Rosholm

Abstract

This paper studies the interplay between genetics and family investments in the process of skill formation. We model and estimate the joint evolution of skills and parental investments throughout early childhood. We document three genetic mechanisms: the direct effect of child genes on skills, the indirect effect of child genes via parental investments, and family genetic influences captured by parental genes. We show that genetic effects are dynamic, increase over time, and operate via environmental channels. Our paper highlights the value of integrating biological and social perspectives into a single unified framework.

Suggested Citation

  • Mikkel Aagaard Houmark & Victor Ronda & Michael Rosholm, 2024. "The Nurture of Nature and the Nature of Nurture: How Genes and Investments Interact in the Formation of Skills," American Economic Review, American Economic Association, vol. 114(2), pages 385-425, February.
    • Handle: RePEc:aea:aecrev:v:114:y:2024:i:2:p:385-425
    DOI: 10.1257/aer.20220456
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    References listed on IDEAS

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    1. Daniel Barth & Nicholas W. Papageorge & Kevin Thom, 2020. "Genetic Endowments and Wealth Inequality," Journal of Political Economy, University of Chicago Press, vol. 128(4), pages 1474-1522.
    2. Pedro Carneiro & Karsten T. Hansen & James J. Heckman, 2003. "Estimating Distributions of Treatment Effects with an Application to the Returns to Schooling and Measurement of the Effects of Uncertainty on College," NBER Working Papers 9546, National Bureau of Economic Research, Inc.
    3. Victor Ronda & Esben Agerbo & Dorthe Bleses & Preben Bo Mortensen & Anders Børglum & Ole Mors & Michael Rosholm & David M. Hougaard & Merete Nordentoft & Thomas Werge, 2022. "Family disadvantage, gender, and the returns to genetic human capital," Scandinavian Journal of Economics, Wiley Blackwell, vol. 124(2), pages 550-578, April.
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    6. Taubman, Paul, 1976. "The Determinants of Earnings: Genetics, Family, and Other Environments; A Study of White Male Twins," American Economic Review, American Economic Association, vol. 66(5), pages 858-870, December.
    7. Carneiro, Pedro & Hansen, Karsten T. & Heckman, James J., 2003. "Estimating Distributions of Treatment Effects with an Application to the Returns to Schooling and Measurement of the Effects of Uncertainty on College Choice," IZA Discussion Papers 767, IZA Network @ LISER.
    8. Orazio Attanasio & Sarah Cattan & Emla Fitzsimons & Costas Meghir & Marta Rubio-Codina, 2020. "Estimating the Production Function for Human Capital: Results from a Randomized Controlled Trial in Colombia," American Economic Review, American Economic Association, vol. 110(1), pages 48-85, January.
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    More about this item

    JEL classification:

    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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