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Study finds the relationship between genes and earnings increased after 1980

Someone sent me a recent NBER working paper by Nicholas W. Papageorge and Kevin Thom on polygenic scores and educational attainment/earnings. Most pertinent to my theoretical interests is that the link between genes and income appears to increase over recent decades.

In my lectures on the politics of media (really about the politics of technology more generally), I dedicate a session to the topic of skill-biased technical change (SBTC). While the econometrics and specific interpretations are debated, there is a literature in Economics that suggests certain technological innovations (i.e. computing) increase the earnings of the highly skilled relative to the less skilled. I would sometimes wonder to what degree "skills," which sound like primarily acquired things, in fact reflect heritable traits. Or if one could separate these out...

Papageorge and Thom provide one of the first efforts to study this question explicitly. "This is the first study to estimate the returns to genetic factors associated with education using micro genetic data and disaggregated measures of earnings and job tasks across cohorts."

Here is their summary of the genetic effect, conditional on time period:

The returns to these genetic endowments appear to rise over time, coinciding with the rise in income inequality after 1980. Accounting for degree and years of schooling, a one standard deviation increase in the score is associated with a 4.5 percent increase in earnings after 1980. These results are consistent with recent literature on income inequality
showing not only an increase in the college premium, but also a rise in the residual wage variance within educational groups (Lemieux, 2006). We also find a positive association between the score and the kinds of non-routine job tasks that benefited from computerization and the development of more advanced information technologies (Autor, Levy, and Murnane, 2003). This provides suggestive evidence that the endowments linked to more educational attainment may allow individuals to either better adapt to new technologies, or specialize in
tasks that more strongly complement these new technologies.

Basically, they observe what you would expect to observe if the computerization that begins around 1980 allowed the escape and takeoff of "non-routine analytic" power or abstract intelligence by those most genetically blessed with it. Implicitly, individuals less genetically blessed with "non-routine analytic" powers begin to be left behind around 1980.

Their findings cannot explain the entire postwar dynamic of increasing inequality and relative stagnation of the lower classes, however, because the flatlining of median wages begins around 1973 if I recall correctly. The study seems somewhat coy about naming or even labeling the polygenic score; but my non-expert intuition is that it would have to be something quite akin to what is called the "g-factor" or general intelligence, right?

One limitation of the study is that they use a dummy variable for the period after 1980. I would be curious to see what happens if one re-runs their models with a continuous variable for year. My intuition is that individual-level economic outcomes are more skill-biased/g-loaded today than in the 1980s, but I'm not yet up on any studies this precise on that question in particular.

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