Genetics and Socioeconomic Status: Some Preliminary Evidence on Mechanisms

Does genetics influence one's economic prospects? I exploit randomness in the genetic transmission from parents to offspring to estimate causal genetic effects. The genetic measure is the polygenic index (PGI) for educational attainment. High-PGI individuals have higher incomes, largely because of their schooling and occupational choices: They get more education and sort into better-paying occupations. Genetics seems to drive individual differences in the marginal benefits and costs of schooling. The evidence suggests fluid intelligence and self-control partly mediate the relationship between the PGI and education. Genetic effects are economically meaningful, comparable in size to effects of family environment.