American Economic Review Vol. 114 No. 2 2024

The Nurture of Nature and the Nature of Nurture: How Genes and Investments Interact in the Formation of Skills

Mikkel Aagaard Houmark¹; Victor Ronda²; Michael Rosholm³

¹ Department of Economics and Business Economics and TrygFonden’s Centre for Child Research, Aarhus University (email: ) · ² TrygFonden’s Centre for Child Research, Aarhus University (email: ) · ³ Department of Economics and Business Economics and TrygFonden’s Centre for Child Research, Aarhus University and IZA (email: )

Abstract

This paper studies the interplay between genetics and family investments in the process of skill formation. We model and estimate the joint evolution of skills and parental investments throughout early childhood. We document three genetic mechanisms: the direct effect of child genes on skills, the indirect effect of child genes via parental investments, and family genetic influences captured by parental genes. We show that genetic effects are dynamic, increase over time, and operate via environmental channels. Our paper highlights the value of integrating biological and social perspectives into a single unified framework.

DOI

10.1257/aer.20220456

Volume

114

Issue

2

Pages

385-425

Language

en

Sources

openalex bibtex:phds-export.bib crossref

Cite

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