Template-Type: ReDIF-Paper 1.0
Author-Name: Nurfatima Jandarova
Author-Name-First: Nurfatima
Author-Name-Last:Jandarova
Author-Email: nurfatima.jandarova@gmail.com
Author-Workplace-Name: Tampere University, Finnish Centre of Excellence in Tax Systems Research (FIT)
Author-Name: Aldo Rustichini
Author-Name-First: Aldo 
Author-Name-Last: Rustichini
Author-Email: aldo.rustichini@gmail.com
Author-Workplace-Name: University of Minnesota
Title: Individual Characteristics and Earnings
Abstract: We study how observed individual characteristics affect earnings of individuals. The characteristics we study are individual personality traits (including cognitive ability) and family background. We make use of data providing information on the individual characteristics rather than estimating them as latent variables. Their contribution may be indirect (facilitating the acquisition of education) or direct (perhaps affecting productivity). We estimate the fraction of these two contributions through regression analysis and structural model, and find that the contribution of both pathways is significant. These characteristics may be in part determined endogenously. To estimate the proportion due to original individual characteristics we use measures provided by Polygenic Scores for education years and fluid intelligence. The marginal effects of these scores is significant and high. The indirect contribution (operating though acquisition of college) is around one third of the total effect.
Length: 43
Creation-Date: 2024-10
Publication-Status: Published in FIT Working Paper Series, Finnish Center of Excellence in Tax Systems Research
File-URL: https://verotutkimus.fi/verotutkimus/wp-content/uploads/2024/10/FIT-WP-26-Individual-Characteristics-and-Earnings-1.pdf
File-Format: Application/pdf
File-Function: First version, 2024
Number: 26
Classification-JEL: J24, I21
Keywords: education, cognitive skills, noncognitive skills, family background, polygenic score
Handle: RePEc:fit:wpaper:26