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Friday, August 14, 2015

Is Economic Success Inherited?

This is by Abdul Alasaad:

Is Financial Success a Product of Inherited Genes?, INET: How much does a family’s wealth determine a child’s financial prospects? ... In his ... essay, Defending the One Percent, Gerg Mankiw links the correlation between people’s earnings with those of their parents to genetic factors. ...
Is Mankiw right to link this strong relationship to genetic factors? Well,.. four economists, in an NBER working paper, compared the wealth of adoptive children to the wealth of their adoptive and biological parents. ...
The relationship between the wealth ranking of adoptive children and with those of their adoptive parents is strikingly positive and almost as strong as the relationship between parents and their biological children...
More conclusively..., a child’s wealth is more strongly correlated with the wealth of their adoptive parents than to the wealth of their biological parents. Nurture, when it comes to wealth, is far more important than nature.
But overall, who had a higher net wealth at the age of 44 prior to any inheritance? Biological children or adopted ones? ... It turns out that the biological children had in fact accumulated more net worth; but by a very small, and almost irrelevant, margin. ...
Equally interesting, the researchers study the variation in attainment of education levels between adopted children and biological ones. If genetic factors matter more than access to opportunity, then biological children of affluent parents must attain higher levels of education than their adopted counterparts. Is this true? Well, The data suggest otherwise. ...
Wealth, like most things in life, has more to do with environmental factors than genetic ones. ...

    Posted by on Friday, August 14, 2015 at 12:33 AM Permalink  Comments (20)


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