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The causal effect of genetic variants linked to cognitive and non-cognitive skills on education and labor market outcomes

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  • Buser, Thomas
  • Ahlskog, Rafael
  • Johannesson, Magnus
  • Koellinger, Philipp
  • Oskarsson, Sven

Abstract

We estimate the effect of genetic variants that are associated with differences in cognitive and non-cognitive skills on labor market and education outcomes by linking genetic data from individuals in the Swedish Twin Registry to government registry data. Genes are fixed over the life cycle and genetic differences between full siblings are random, making it possible to establish the causal effects of within-family genetic variation. We show that polygenic indices associated with cognitive skills and personality traits significantly affect income, occupation, and educational attainment. By comparing estimates that use only within-family variation to OLS estimates with and without socioeconomic controls, our results also provide indications of the degree of (residual) confounding, which can be useful for research conducted in datasets that do not contain sibling pairs. Overall, our results indicate that education and labor market outcomes are partially the result of a genetic lottery.

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  • Buser, Thomas & Ahlskog, Rafael & Johannesson, Magnus & Koellinger, Philipp & Oskarsson, Sven, 2024. "The causal effect of genetic variants linked to cognitive and non-cognitive skills on education and labor market outcomes," Labour Economics, Elsevier, vol. 90(C).
    • Handle: RePEc:eee:labeco:v:90:y:2024:i:c:s0927537124000393
    DOI: 10.1016/j.labeco.2024.102544
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    More about this item

    Keywords

    Personality traits; Economic preferences; Cognitive skills; Labor markets; Education; Polygenic indices;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education

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