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Separating Nature from Privilege: Direct and Indirect Genetic Effects on Education and Wealth

Polygenic risk scores correlated with educational and labor market success were widely mistaken for pure biological talent; sibling genomic designs reveal that half of claimed genetic effects reflect indirect parental privilege and dynastic wealth.

Author
Senan Hogan-Hennessy
Published
2026
Journal
arXiv (Cornell University)
Last updated
September 2026
Separating Nature from Privilege: Direct and Indirect Genetic Effects on Education and Wealth

The advent of genome-wide association studies (GWAS) allowed scientists to calculate polygenic scores that correlate with educational attainment, college graduation, and lifetime income.

Genetic determinists seized upon these findings to argue that economic inequality is rooted in biology, ignoring that successful parents pass down both their DNA and vast social, economic, and cultural advantages to their children.

This econometric and behavioral genetics paper utilizes within-family sibling genomic designs to untangle direct biological effects from indirect parental environment effects (genetic nurture). The analysis proves that traditional population-level genetic scores overestimate direct causal effects by over fifty percent due to dynastic social stratification.

De-confounding direct genetics from parental privilege establishes rigorous econometric safeguards in social genomics, warning against fatalistic biological narratives of economic inequality.

Reference

Hogan-Hennessy, S. (2026). The Direct and Indirect Effects of Genetics and Education (Version 3). arXiv.

Title

The Direct and Indirect Effects of Genetics and Education

Abstract

Genes associated with educational attainment causally improve labour market income, but the economic mechanism behind this relationship is not clear. Using quasi-random variation in genetic inheritance across siblings in the UK Biobank, I estimate the causal effect of the Education PolyGenic Index (Ed PGI) on education and income. A one standard deviation increase in the Ed PGI raises completed education by 0.5 years and later-life income by around 5 percent (replicating the main estimates in Carvalho 2025). I then decompose this total genetic income effect into an indirect channel operating through education years and a residual direct effect, using a causal mediation framework. Unlike structural model-based decompositions, this approach is design-based; one remaining source of uncertainty (the causal return to an extra year of education) is handled transparently through a sensitivity analysis. At correlational education returns of around 6 percent, 65 to 75 percent of the total genetic income effect operates through the years of education channel. Quasi-experimental estimates from the economics literature for Britain imply higher returns to education, suggesting that the mediated share is larger and that the majority of the Ed PGI's income effect operates through completed years of education.

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