Arbeitspapier

Dynamic complementarity in skill production: Evidence from genetic endowments and birth order

The birth order literature emphasizes the role of parental investments in explaining why firstborns have higher human capital outcomes than their laterborn siblings. We use birth order as a proxy for investments and interact it with genetic endowments. Exploiting only within-family variation in both ensures they are exogenous as well as orthogonal to each other. As such, our setting is informative about the existence of dynamic complementarity in skill production. Our empirical analysis exploits data from 15,019 full siblings in the UK Biobank. We adopt a family-fixed effects strategy combined with instrumental variables to deal with endogeneity issues arising from omitted variables and measurement error. We find that birth order and genetic endowments interact: those with above-average genetic endowments benefit disproportionally more from being firstborn compared to those with below-average genetic endowments. This finding is a clean example of how genetic endowments ('nature’) and the environment ('nurture’) interact in producing educational attainment. Moreover, our results are consistent with the existence of dynamic complementarity in skill formation: additional parental investments associated with being firstborn are more ‘effective’ for those siblings who randomly inherited higher genetic endowments for educational attainment.

Language
Englisch

Bibliographic citation
Series: Tinbergen Institute Discussion Paper ; No. TI 2020-082/V

Classification
Wirtschaft
Intertemporal Household Choice; Life Cycle Models and Saving
Education and Inequality
Human Capital; Skills; Occupational Choice; Labor Productivity
Subject
Birth order
dynamic complementarity
gene-environment interaction
educational attainment
polygenic score

Event
Geistige Schöpfung
(who)
Muslimova, Dilnoza
van Kippersluis, Hans
Rietveld, Cornelius A.
von Hinke, Stephanie
Meddens, S. Fleur W.
Event
Veröffentlichung
(who)
Tinbergen Institute
(where)
Amsterdam and Rotterdam
(when)
2020

Handle
Last update
10.03.2025, 11:44 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Muslimova, Dilnoza
  • van Kippersluis, Hans
  • Rietveld, Cornelius A.
  • von Hinke, Stephanie
  • Meddens, S. Fleur W.
  • Tinbergen Institute

Time of origin

  • 2020

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