Sibling Differences in Genetic Propensity for Education: How Do Parents React?

Abstract

We take advantage of recent advances in genomics to revisit a classic question in economics: how do parents respond to children's endowments and to sibling differences in endowments? We use an index based on DNA, which is fixed at conception and assigned randomly across siblings, as a proxy for educational endowments. We find that parents of nontwins display inequality aversion: given the absolute endowment level of one child, they invest less in him/her if his/her sibling has a lower genetic predisposition to education. In contrast, we find no evidence that parents of dizygotic twins react to endowment differences between children.