Genetic Endowments and Wealth Inequality

That new paper by Daniel Barth, Nicholas W. Papageorge and Kevin Thom is attracting a great deal of attention and also some controversy.  Here is the first sentence of the abstract:

We show that genetic endowments linked to educational attainment strongly and robustly predict wealth at retirement.

But it’s not mainly about IQ.  I found this to be the most interesting part of the paper, noting that EA is a polygenic score:

Our use of the EA score as a measure of biological traits linked to human capital is related to previous attempts in the literature to measure ability through the use of tests scores such as IQ or the AFQT…We note two important differences between the EA score and a measure like IQ that make it valuable to study polygenic scores. First, a polygenic score like the EA score can overcome some interpretational challenges related to IQ and other cognitive test scores. Environmental factors have been found to influence intelligence test results and to moderate genetic influences on IQ (Tucker-Drob and Bates, 2015). It is true that differences in the EA score may reflect differences in environments or investments because parents with high EA scores may also be more likely to invest in their children. However, the EA score is fixed at conception, which means that post-birth investments cannot causally change the value of the score. A measure like IQ suffers from both of these interpretational challenges. High IQ parents might have high IQ children because of the genes that they pass on, but also because of the positive investments that they make…Compared to a cognitive test score like IQ, the EA score may also measure a wider variety of relevant endowments. This is especially important given research, including relatively recent papers in economics, emphasizing the importance of both cognitive and non-cognitive skills in shaping life-cycle outcomes (Heckman and Rubinstein, 2001). Existing evidence suggests a correlation of approximately 0.20 between a cognitive test score available for HRS respondents and the EA score (Papageorge and Thom, 2016). This relatively modest correlation could arise if both variables measure the same underlying cognitive traits with error, or if they measure different traits. However, Papageorge and Thom (2016) find that the relationship between the EA score and income differs substantially from the relationship between later-life cognition scores and income, suggesting that the EA score contains unique information…

…we interpret the EA score as measuring a basket of genetic factors that influence traits relevant for human capital accumulation.

If I understand the paper correctly, the polygenic score is what predicts well from the genetic data set, it is not a “thing with a known nature.”  And I believe the results are drawn from the same 1.1 million person data set as is used in this Nature paper.


Okay, but say you were conceived with genes giving you a 99th percentile polygenic score for Educational Attainment. Presumably, however, your mother and father probably both score pretty well on their PGS for EA as well. So, assuming you weren't adopted, you'd likely have both Nature and Nurture working toward you doing well in Educational Attainment. Right?

Adoption and twin studies can get around some of these issues, but even they can be tricky

Yes, in the classical twin design where you compare MZ and DZ twins raised together, nature and nurture are not confounded because twins share the same "genetic nurture" (or "passive gene-environment correlation") regardless of zygosity. As long as the assumptions of the twin model (in particular, the equal treatment of MZ and DZ twins) are fulfilled, the model correctly attributes the effects of genetic nurture to the shared family environment. Studies using genomic methods in unrelated individuals will produce estimates where nature and nurture may be confounded.

While some have suggested that the advent of genomic methods makes twin and family studies obsolete, the two types of methods are really complementary and both are needed for credible causal inference.

"Wealth at retirement". A good goal but this is actually something that anyone could achieve. Usually in life it is a life mistake or multiple mistakes that cause you to not succeed. Things like: choosing to fake your way through school, using drugs or alcohol, committing a crime(s), marrying badly/divorce, etc. Success in our Western society is easy but because of our freedoms diversion and bad choices are easy too. It all depends on what choices we make.

Wait. The HRS sample doesn't start until people reach 50? So if, say, EA was negatively correlated with propensity to develop dementia, that alone would get you the same result, yes?

Seems unlikely, given that the same polygenic score explains 10.6% of the variation in educational attainment in the same sample. Few people develop Alzheimer's while getting a college degree.

"explains" only in the sense of statistical jargon, not "explains" in the everyday sense.

They searched the world for price indices that match their desired effect, and found the price index o use. Really, not a bad idea, fins the things in life most correlated with the thing under study, it certainly narrows down the plausable theories.

This pretty much sums it up. "we interpret the EA score as measuring a basket of genetic factors that influence traits relevant for human capital accumulation", i.e. we have no idea what's going on.

Not exactly "no idea": they know in general what each gene is involved in, and the SNPs identified as influencing the EA polygenic score are predominantly brain or nervous system related, in particular genes involved in the fetal development of said systems.

They don't know how to specifically map a single gene right through to how it affects IQ, and they may never know that.

But we can guess that if the genes in question are involved in building the brain in utero, they affect EA and IQ by how big, well connected, and efficient they build it. Once built you don't get a second chance. Plasticity may help fill up your memory card, but it can't give you a different CPU. This explains why IQ is so persistent across life.

How much do genetics determine attractiveness and sexual success? I suspect as much as EA determines wealth, or more.

To someone who cares about wealth inequality, what would be your prescription for "correcting for" the variance explained by natural endowment? Do you see anything wrong with sexual inequality? Would your prescription for wealth inequality have an analogy to sexual inequality caused by natural endowment? And would you be comfortable if it were applied to "correct for" sexual inequality due to natural endowment?

To someone who cares about promoting monogamy, what would the analogy in wealth inequality? Employer/employee loyalty? Jobs for life? Would you be comfortable promoting such a policy for the sake of correcting for wealth inequality due to natural endowment?

I would say the solution is to legalize prostitution, develop more advanced forms of pornography, and loosen social norms to encourage more production of sex, much as the solution to poverty historically has been new technologies that make it easier to produce enough products cheaply for poor people to enjoy a decent level of consumption. Promoting greater monogamy is the wrong approach that could increase inequality by preventing some people from entering the sexual market entirely, just as inflexible economic programs where people are tied to specific lands or employers do.

"I would say the solution is to legalize prostitution, develop more advanced forms of pornography, and loosen social norms to encourage more production of sex,"

Nothing of this will solve the problem of "unequal distribution of romantic partnerships"; perhaps some advanced AI, like in the film "Cherry 2000".

It is not about solving the problem (which is impossible), but reducing it on the margin.

The comparison to wealth inequality is instructive here. There is still large amounts of wealth inequality, but the actual difference in consumption between a poor person and a rich person (at least in rich countries) is smaller than it ever was before. Today the difference between rich and poor is not in having enough to eat (as it was in the past), but the quality of the food. Similarly, a world where the sexually desirable get high-quality romantic relationships and the undesirables get a decent simulation is less unequal than one where the desirable get high-quality romantic relations and the undesirable get nothing.

The problem is the jump to looking for a 'correction' that needs to 'be applied'. Humans (all species) are the products of our genetics, We are not, and never will be 'equal'. Any attempt to apply 'corrections' will by nature become authoritarian (see 'Harrison Bergeron' for a prescient satirical view of this)

EA scores will be the cranial measures of this century. With fancy papers, charts, and numbers, it will have the appearance of science but will end up being scientism.

Cranial measurements ironically turned out to be right, in the form of MRI-measured brain size versus IQ. See Richard Haier's book, for instance. A lot of stuff has happened in the decades since "Mismeasure of Man." Catch up on your reading, my friend.

My impression, based on developments like Paige Harden's upcoming book "Genetic Lottery," is that rather than trying to discredit science like polygenic scores (although there is much to be worked out there), the science-literate progressive strategy is to promote the idea of "unearned genetic privilege" as a bodies for income redistribution proposals like UBI and higher taxes on the wealthy, as well as various social programs and reparations.

One bit of catching up to do is simply to learn that Gould lied.

But then he was a communist, so not to lie would be evidence of insincerity.

Are you suggesting that we need to apply 'corrections' for genetic makeup? Really?

Let's start with pro sports. Tall, powerful men dominate the big earnings... We need to mandate a certain percentage to to short fat guys as well... And women as well, even of they're 5 ft tall. Society must compensate for any genetic differences,

Its a fait accompli that it will predict something (although issues with whether results simply represent latent population structure are major given weak individual polygenuc effects).

The strange suggestions are those who like Alex T would somehow suggest these scores should be used to "pick winners" as an alternative to realised cognitive and education scores....

"Genetic endowments related to human capital accumulation" are the things we inherit, not only genes but all inherited attributes. The attributes inherited by someone growing up in Darien or Easton, Connecticut, are far different from those inherited by someone growing up in Bridgeport or Waterbury, attributes such as "financial decision-making, including stock market participation, business ownership, the financial planning horizon, and macroeconomic expectations". Call it the SCQ (self-confidence quotient). Brett Kavanaugh, born and raised in privilege, has a high SCQ; indeed, it borders on arrogance, which almost but not quite offset the benefits of his high SCQ. Donald Trump, born and raised in privilege, has a high SC; indeed, the combination of a domineering father and the overarching influence of Norman Vincent Peale (author of The Power of Positive Thinking), the pastor at the church attended by Trump's family and close family friend, in his life pushed Trump's SCQ off the charts, to the point he cannot admit mistakes and can never apologize for his behavior no matter how despicable.

Yesterday's Gospel lesson was the parable of the rich fool (with a high SCQ), Luke 12:13-21:

“Someone in the crowd said to him, “Teacher, tell my brother to divide the inheritance with me.” Jesus replied, “Man, who appointed me a judge or an arbiter between you?” Then he said to them, “Watch out! Be on your guard against all kinds of greed; life does not consist in an abundance of possessions.” And he told them this parable: The ground of a certain rich man yielded an abundant harvest. He thought to himself, ‘What shall I do? I have no place to store my crops. Then he said, ‘This is what I’ll do. I will tear down my barns and build bigger ones, and there I will store my surplus grain. And I’ll say to myself, “You have plenty of grain laid up for many years. Take life easy; eat, drink and be merry.”’ But God said to him, ‘You fool! This very night your life will be demanded from you. Then who will get what you have prepared for yourself?’ “This is how it will be with whoever stores up things for themselves but is not rich toward God.”

It seems to me that the pathologies of the ghetto and the gang do not come from its inhabitant's lack of self-confidence or malignant narcissism. These things they have in spades.

Is it a coincidence that I'm a high IQ individual (either 139 on a fun test or a above 120 on a more serious, week long test, years later and I missed some questions due to references to UK pop culture) and my family is in the 1%? I think not.

Bonus trivia: I earned my money the old-fashioned way. I inherited it.

"Bonus trivia: I earned my money the old-fashioned way. I inherited it."

Yes; I've noticed that the children of rich people often become rich when their parents die. This usually happens after they have left home, so the "shared environment" explanations can be discounted; genetics explains everything!

The effect of the shared environment is estimated from sibling correlations, so when they leave home is irrelevant per se.

This is along the lines of my observation that people struggling with money seem to not worry. It's not the high IQ folks but those genetically more anxious who have the big savings accounts at retirement. Democrats contend the opposite that poor people held back by the stress of worry. That is not what I see among the broke and indebted people who I've known.
Vive la difference.

It's a good job that these polygenetic scores don't vary by ethnic group!


And yet, oddly enough, the blessings of genetic superiority never seem to make themselves visible in real world accomplishments.

If they did, we wouldn't need to perform all sorts of studies and analysis, we could simply look at those who succeed, and their superiority would be self evident.

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