We decompose sibling correlations and intergenerational elasticities of life-cycle earnings and education into pre- and post-birth factors within a unified framework that nests previous models. Using data on the Danish population of twins and their children we find that post-birth factors can explain a higher share of siblings’ similarity in income and education. This share is higher than in previous studies because we allow for heterogeneity in the environmental influences across sibling types. We also show that pre-birth factors explain a higher share of the similarity in income and education between fathers and sons. Finally, we find that pre-birth factors matter more for income than for education, no matter which measure we consider.
Presented in Session 32. Genetic and Social Factors in the Production of Cognitive and Educational Advantages