Sandra Black, Paul, Devereux, Petter Lundborg, and Kaveh Majlesi write:

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.

Black is speaking at the sociology department this Thursday. The topic seems important.

A few quick thoughts:

1. The article discusses various causes of the intergenerational transmission of education and income, including genetics, direct financial inheritance, and other influences of parents on education, financial opportunities, preferences and attitudes. That’s all fine but I think they missed a few things, including fetal environment (not really the same thing as parents “investing in their children’s human capital”), social environment (children influenced not by parents but by siblings, schoolmates, etc.), and politics (rich people setting up the system in a way that benefits rich kids in general, not just their kids). This last item is particularly salient to me as a political scientist—and also as a statistician, as a reminder that we can consider aggregate treatments when looking at individual outcomes.

Speaking more generally, the division into “biology” (defined as “genetic inheritance”) and “environment” (defined as things that parents do) is problematic.

To give the above list of possible factors is not to say that the conclusions of the above-linked paper are wrong, just that the theoretical framework of the paper could be expanded, which would affect the implications of the empirical results that are presented.

2. I suppose that another key question is how much these results generalize from Sweden to other countries.

3. I didn’t try to follow all the details of the above-linked article. In any revision I would hope to see some graphs of raw data and fitted model. Whenever there is an empirical result, I like to see the trail leading from data and assumptions to substantive conclusions. That should not be difficult to do for this paper, and I think it could make the reasoning clearer and the findings more influential.