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

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.