Which matters: nature or nurture?

Both do, according to a pathbreaking paper presented to Harvard's Inequality Summer Institute earlier this year. Using a quite remarkable Swedish dataset by merging data from administrative sources and censuses, the authors Anders Björklund (Stockholm University), Markus Jäntti (Abo Akademi University) and Gary Solon (University of Michigan) examine the correlation of socioeconomic status  between parents and children, and find that both nature and nurture matter. The paper, Nature and Nurture in the Intergenerational Transmission of Socioeconomic Status: Evidence from Swedish Children and Their Biological and Rearing Parents (PDF), concludes:

The adult socioeconomic status of Swedes born between 1962 and 1965 appears to be positively associated with the socioeconomic status of both their biological parents and their rearing parents, when those parents are not the same as each other as well as when they are. Accordingly, our paper is entitled “Nature and Nurture,” not “Nature vs. Nurture.” We see no logical or empirical need to choose between the two. Our evidence suggests substantial importance for both.

Note: An earlier paper by the two authors, Influences of Nature and Nurture on Earnings Variation:
A Report on a Study of Various Sibling Types in Sweden (PDF), published in 2005, used data from the Swedish Twin Registry, to examine the importance of genes and environment in accounting for earnings variation. It concluded that genetic influences were important:

Even our smallest estimates of the genetic component of earnings variation, however, suggest that it accounts for about 20 percent of earnings inequality among men and more than 10 percent among women.

However, almost two-thirds of earnings variation could be explained neither by genetics or environment:

Although our results point to a significant role for genetic variation, perhaps the most striking finding is the most obvious one – about the importance of non-shared environment. The largest sibling correlation in earnings that we estimate is a 0.36 correlation for monozygotic twin brothers. Even though these brothers have identical genes and, according to our preferred model, experience even more similar environments than other sibling pairs do, an estimated 64 percent of their earnings variation is explained by neither genetic nor environmental resemblance. In other words, much and perhaps most of earnings variation in Sweden stems from environmental factors that are not shared even by monozygotic twins.

Neither genes nor the environment in which we are raised determine (most of) our future earnings.

Comments

[egghat]

One clarification:

The report is only about earnings *variation*.

The last sentence "Neither genes nor the environment in which we are raised determine (most of) our future earnings" is therefore not correct. It may lead to the conclusion that the *height* of your earnings can not be explained by the two factors.

Children of two doctors have a higher probabilty of earning 60.000 USD/GBP/EUR later, but with an income of 60.000 and 80.000 they have the same variation as two children for a working calls family that get 12.000 and 16.000 per year.

The last sentence is somewhat misleading. At least it was for me (until I digged a bit deeper).

[Lafayette]

I recall a study, done in the seventies, that found a direct corellation between height and executive earnings.

Another found no relationship between earnings and any particular university from which a person graduated. The fact that an individual does have an university degree does seem to pertain.

I can't for the life of me find it anywhere on the net. A shame, because in my experience, both findings makes a lot of sense.