The Nature and Nurture of Economic Outcomes

The relative importance of biology and envi- ronment is one of the oldest and most prominent areas of scientific inquiry and has been exam- ined by researchers as diverse as David Hume (1748), Charles Darwin (1859), and Sigmund Freud (1930). Social scientists are particularly interested in the degree to which family and neighborhood environmental factors influence a child’s educational attainment and earnings. The stakes in this debate are quite high and far-reaching. As Richard Herrnstein and Charles Murray (1994) point out, the effectiveness of anti- poverty and pro-education policies is largely de- pendent on the degree to which environment matters. Any claim of treatment effects from dif- ferent family structures, different teachers, differ- ent peers, or different neighborhoods needs as a pre-condition that some aspects of environment are important to long-term outcomes. Attempts to understand the root causes of income inequality often involve trying to sort out the effects of family background from the effects of genetic endowments (see e.g., Zvi Griliches and William Mason, 1972; Christopher Jencks, 1972). In this paper I use data on adoptees to identify the causal effect from being adopted into a high-socioeconomic-status (SES) family versus a lower-SES family. I examine a range of out- comes including educational attainment, marital status, test scores, and the selectivity of college attended