The Nature and Nurture of Economic Outcomes

Abstract

This paper uses data on adopted children to examine the relative importance of biology and environment in determining educational and labor market outcomes. I employ three long-term panel data sets which contain information on adopted children, their adoptive parents, and their biological parents. In at least two of the three data sets, the mechanism for assigning children to adoptive parents is fairly random and does not match children to adoptive parents based on health, race, or ability. I find that adoptive parents' education and income have a modest impact on child test scores but a large impact on college attendance, marital status, and earnings. In contrast with existing work on IQ scores, I do not find that the influence of adoptive parents declines with child age.