Parents: Nature and Nurture

Part III of Social Economics continues with a focus on how parents influence economic outcomes of their children. The connection between parents and children has two pathways: biological, covering both genes and hormones, and environmental. While both nature and nurture are important, some surprising findings from genoeconomics suggest that nature plays an outsize role. The critical role of genes in shaping economic outcomes is now just as well-documented as the health impacts of DNA. Economic impacts, ranging from educational attainment to risk tolerance, play a critical role in shaping economic success, such as employment and wealth. While the genetic connection is strong, it is not immutable, as epigenetics, the study of how genes react with the environment, shows: a child’s environment, from conception to adulthood, can alter economic-related fortunes. Part of that environment includes the role of parents in providing academic/cognitive support, a healthy and safe environment, social networks, and non-cognitive attributes, all discussed in detail. The implications of findings in the nature versus nurture debate are dramatic. How we think about inequality and opportunity, even the structure of economic systems themselves, is based on our understanding of the origin of individual ability, effort, choice, preferences, and a host of other traits.