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14:00 | Applied Micro Research Seminar
University of Amsterdam, Amsterdam, Netherlands
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Authors: Rafael Ahlskog, Magnus Johannesson, Philipp Koellinger and Sven Oskarsson
Abstract: A large literature in economics establishes that cognitive and non-cognitive skills are strongly correlated with educational attainment and professional achievement. Isolating the causal effects of these traits on career outcomes is complicated by reverse causality and selection issues. We suggest a new approach: using within-family differences in the genetic tendency to exhibit the relevant traits as a source of exogenous variation. 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 variation in genetic tendencies. Linking data from fully genotyped individuals in the Swedish Twin Registry to government registry data, we find strong evidence for a causal effect of cognitive skills, personality traits and economic preferences on professional achievement and educational attainment. Our results also demonstrate that education and labor market outcomes are partially the result of a genetic lottery.
