In Nature, Nurture and Income, Alex Tabarrok examines “a fascinating new paper” by Bruce Sacerdote, What Happens When We Randomly Assign Children to Families?
Holt’s International Children’s Services places children, primarily Koreans, with families in the United States. Holt has an interesting proviso to their adoption contract, conditional on being accepted into the program, children are randomly assigned. Sacerdote has collected data from children who were adopted between 1970-1980, and thus who today are in their mid 20′s or 30′s, and their adoptive parents.
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The income of biological children increases strongly with parental income but the income of adoptive children is flat in parent income. What does this mean?
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What do parents transmit to their biological children but not to their adopted children? Genes. When we observe, as we do, that low-income parents tend to have low-income children and high-income parents tend to have high-income children we should not bemoan the inequities of nurture but rather the inequities of nature.