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On the Origins of Socioeconomic Inequalities: Evidence from Twin Families

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  • Paul Bingley
  • Lorenzo Cappellari
  • Konstantinos Tatsiramos

Abstract

Using Danish Twins Registry and population data, we link twins with their relatives to evaluate the controversial assumptions of the classic twin model and decompose socioeconomic inequality into genetic (heritability) and environmental factors. We reject the equal environments assumption, finding that the classic model overestimates heritability. Heritability explains 9% of variation in education and 14-16% in earnings, income, and wealth, helping to fill the ‘missing heritability’ gap between the classic twin model and Genome-Wide Association Studies. Shared environments account for 26-42% of these variances and 45-81% of intergenerational persistence. These findings reconcile estimates from twin and adoptee studies.

Suggested Citation

  • Paul Bingley & Lorenzo Cappellari & Konstantinos Tatsiramos, 2024. "On the Origins of Socioeconomic Inequalities: Evidence from Twin Families," LISER Working Paper Series 2024-03, Luxembourg Institute of Socio-Economic Research (LISER).
    • Handle: RePEc:irs:cepswp:2024-03
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    Cited by:

    1. Cornelius A. Rietveld, 2024. "Heritability and public policy reconsidered, again," Tinbergen Institute Discussion Papers 24-012/V, Tinbergen Institute.

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    More about this item

    Keywords

    nature; nurture; family background; genes; environment inequality;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity

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