Genetic Ability and Intergenerational Earnings Mobility

This paper examines the role of genetic ability in generating the strong positive intergenerational earnings correlation observed in the USA. We compare the intergenerational wage and earnings elasticities of adopted children with these of non-adopted children. Because adopted children's geneti...

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Bibliographic Details
Published in:Journal of population economics 2009-01, Vol.22 (1), p.75-95
Main Authors: Liu, Haoming, Zeng, Jinli
Format: Article
Language:English
Subjects:
Adopted children
Adoptive parents
Child rearing
Childbirth
Children
Children & youth
Correlation
Correlation analysis
Demography
Earnings
Economic theory
Economics
Economics and Finance
Elasticity of demand
Endowment
Endowments
Families & family life
Fathers
Generations
Genetics
Human capital
Income
Income transfer
Intergenerational relationships
Labor
Labor Economics
Low income groups
Original Paper
Parents
Parents & parenting
Population Economics
Siblings
Social Policy
Studies
U.S.A
Wages
Wages & salaries
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Summary:This paper examines the role of genetic ability in generating the strong positive intergenerational earnings correlation observed in the USA. We compare the intergenerational wage and earnings elasticities of adopted children with these of non-adopted children. Because adopted children's genetic ability does not depend on that of their adoptive parents, the differences between these two samples reveal the importance of genetic ability in transmitting earnings ability across generations. We find that the earnings correlation between fathers and children would be halved if their biological link was removed. Our results suggest that inheritable ability plays a very important role in passing parents' earnings ability on to their children.
ISSN:0933-1433
1432-1475
DOI:10.1007/s00148-007-0171-6