Home / Politics / Policy /  Genetic factors may have a role to play in economic inequality

Bengaluru: Economic inequality may in part be driven by genetic factors, argues a new National Bureau of Economic Research (NBER) working paper by Daniel Barth of the University of Southern California and co-authors. The authors show that genes related to educational attainment can explain variations in the wealth of retired Americans. The authors use an existing database of more than a million persons that links educational attainment with specific genes and then use that relationship to rank the genes of a different sample of people—more than 7,000 retired Americans — to arrive at their results. The results seem to suggest that economic inequality may be more difficult to tackle than previously thought, given that genes are passed down generations.

The authors write that their findings should be seen as “preliminary evidence that genetic endowments related to human capital accumulation are associated with wealth not only through educational attainment and labour income, but also through a facility with complex financial decision-making".

Also Read: Genetic Endowments and Wealth Inequality

It is not just genes that affect your test scores. Even heat might, according to an NBER working paper by Joshua Goodman of the Harvard Kennedy School and co-authors. The study, based on an analysis of PSAT test scores of students in the US, shows that students without air conditioning learn less compared with students with air conditioning. The effects were seen to be more adverse for poor children and black and Hispanic students.

Also Read: Heat and Learning

E-commerce may be contributing to lower prices in the US, says a new research paper by Austan D. Goolsbee of the University of Chicago Booth School of Business and Peter J. Klenow of Stanford University. Using data on online transactions between 2014 and 2017, they find that online inflation is on average 1.3 percentage points lower than the consumer price index (CPI) inflation for equivalent products per year. This was true for most categories of goods apart from medicine and medical supplies.

Also Read: Internet Rising, Prices Falling: Measuring Inflation in a World of E-Commerce

Courts have played an important role in ensuring fulfilment of the right to education in developing countries including India and Indonesia, shows a recent World Bank report by Andrew Rosser of the University of Melbourne and Anuradha Joshi of the Institute of Development Studies, University of Sussex. For instance, the Supreme Court of India has consistently ruled in favour of upholding the quota for poorer children in private schools, while the high court in Uttarakhand required the state government to adopt minimum qualification standards for teachers. But litigation as a strategy for improving education outcomes has limitations as judgements are often enforced by the same public officials who are the objects of the lawsuits. Even when judgements are implemented, they are more often about access to education and seldom about improving quality.

Also Read: Using Courts to Realize Education Rights: Reflections from India and Indonesia

Economics Digest runs weekly, and features interesting reads from the world of economics.

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