Work

Genetic Endowments and Wealth Inequality

Year: 2019

Type: article

Abstract: We show that genetic endowments linked to educational attainment strongly and robustly predict wealth at retirement. The estimated relationship is not fully explained by flexibly controlling for education and labor income. We therefore investigate a host of additional mechanisms that could account for the gene-wealth gradient, including inheritances, mortality, risk preferences, portfolio decisions, beliefs about the probabilities of macroeconomic events, and planning horizons. We provide evidence that genetic endowments related to human capital accumulation are associated with wealth not only through educational attainment and labor income, but also through a facility with complex financial decision-making.

Source: Journal of Political Economy

DOI: 10.1086/705415

Authors: Daniel Barth, Nicholas W. Papageorge, Kevin Thom

Institutions: University of Southern California, National Bureau of Economic Research, Johns Hopkins University, University of Wisconsin–Milwaukee

Language: English

Topic: Financial Literacy, Pension, Retirement Analysis

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Reduced inequalities

Open Access status: green

Funder: National Institute on Aging