Conscription forces young men to serve in the military, irrespective of their opportunity costs. Using random assignment in the Danish draft lottery, we find a negative average effect of peacetime military service on earnings, an effect varying by ability, with high-ability men facing a $23,000 lifetime earnings penalty but with low-ability men facing none. This gradient is robust to different measures of labor market prospects. Educational disruption is an important mechanism, while service has little effect on health or criminal activity. The opportunity costs of conscription are borne by men with the best labor market prospects.

We introduce a novel strategy to study the intergenerational transmission of human capital skills, net of genetic skill transfers. For this purpose, we use unique Danish data on children conceived through sperm and egg donation in in vitro fertilization treatments to estimate the relationship between child test scores and parental years of schooling. Because the assignment of donors is not selective, these parental schooling estimates allow for a causal nurture interpretation. Once we take account of genes, we find that only the education of mothers matters: the association between father’s education and child test scores (in reading and math) is insignificant and practically zero, whereas the association between mother’s education and child test scores (in reading, not in math) is significant and large, and as large as the association we estimate for mothers of non-donor children.

We study the long-term impact of a policy-driven change in childhood nutrition. For this purpose, we evaluate a program that rolled out nutritious school lunches free of charge to all pupils in Swedish primary schools between 1959 and 1969. We estimate the impact of the program on children’s economic, educational, and health outcomes throughout life. Our results show that the school lunch program generated substantial long-term benefits, where pupils exposed to the program during their entire primary school period have 3% higher lifetime income. The effect was greater for pupils that were exposed at earlier ages and for pupils from poor households, suggesting that the program reduced socioeconomic inequalities in adulthood. Exposure to the program also had substantial effects on educational attainment and health, which can explain a large part of the effect of the program on lifetime income.

This paper introduces a new IV strategy based on IVF (in vitro fertilization) induced fertility variation among childless women to estimate the causal effect of having children on their career. For this purpose, we use administrative data on IVF treated women in Denmark. Because observed chances of IVF success do not depend on labor market histories, IVF treatment success provides a plausible instrument for childbearing. Our IV estimates indicate that fertility effects on earnings are: (i) negative, large, and long-lasting; (ii) driven by fertility effects on hourly earnings and not so much on labor supply; and (iii) much stronger at the extensive margin than at the intensive margin.

We investigate whether acquiring more primary education has long-term effects on risk-taking behavior in financial markets. Using exogenous variation in education from a compulsory schooling change combined with wealth data for the Swedish population, we estimate the effect of education on stock market participation and on the share of financial wealth invested in stocks, conditional on participation. For men, an extra year of education increases market participation by two percentage points and the share of financial wealth allocated to stocks by 10%. We find suggestive evidence that greater financial wealth is a potential channel through which education increases participation, consistent with the existence of fixed costs. Lower risk aversion is a potential channel through which education increases the stock share. The reform has less effect on female schooling attainment and there is no evidence that this additional education affects women’s asset allocation. There is no evidence of spillovers to children.

Wealth is highly correlated between parents and their children; however, little is known about the extent to which these relationships are genetic or determined by environmental factors. We use administrative data on the net wealth of a large sample of Swedish adoptees merged with similar information for their biological and adoptive parents. Comparing the relationship between the wealth of adopted and biological parents and that of the adopted child, we find that, even prior to any inheritance, there is a substantial role for environment and a much smaller role for pre-birth factors and we find little evidence that nature/nurture interactions are important. When bequests are taken into account, the role of adoptive parental wealth becomes much stronger. Our findings suggest that wealth transmission is not primarily because children from wealthier families are inherently more talented or more able but that, even in relatively egalitarian Sweden, wealth begets wealth. We further build on the existing literature by providing a more comprehensive view of the role of nature and nurture on intergenerational mobility, looking at a wide range of different outcomes using a common sample and method. We find that environmental influences are relatively more important for wealth-related variables such as savings and investment decisions than for human capital. We conclude by studying consumption as an overall measure of welfare and find that, like wealth, it is more determined by environment than by biology.

Financial investment behavior is highly correlated between parents and their children. Using Swedish data, we find that the decision of adoptees to hold equities is associated with the behavior of both biological and adoptive parents, implying a role for both genetic and environmental influences. However, we find that nurture has a stronger influence on the share of financial assets invested in equities and on portfolio volatility, suggesting that financial risk‐taking is substantially environmentally determined. The parental investment variables substantially increase the explanatory power of cross‐sectional regressions and so may play an important role in understanding cross‐sectional heterogeneity in investment behavior.