Job Market Paper:

Leveling Health Inequalities: Raising the School Leaving Age Reduces the Risk of Diseases and Severe Medical Conditions Related to Genetic Endowment

Health inequality has a significant genetic component and environments such as education can moderate the effects of genes. However, little is known about whether more years of education can effectively moderate the relationship between genetic conditions and severe contemporary diseases and medical conditions. I use UK Biobank data to investigate the relationship between education, genetic endowment, and four health conditions: heart attack, cancer, stroke, and type-2 diabetes. To avoid the potential endogeneity of education, I focus on the long-term health consequences of a 1972 increase in the school-leaving age (ROSLA). As a measure of genetic endowment, I use an index of genetic predispositions for obesity. Genetic predispositions are typically summarised by a weighted average of individual genetic markers, where weights are derived from analyses, performed on different populations, which correspond to select outcomes, such as obesity. This may skew the results of follow up studies of other outcomes, such as cancer. I introduce a two-step method that adjusts the available weights to new outcomes, and show that genetic predisposition for obesity increases the risks of the four diseases I study.

Work in Progress:

The Role of Gene-Environment Interaction in the Formation of Risk Attitudes

Attitudes toward risk (risk attitudes) are an important feature of every individual's decision-making process. Recent empirical literature suggests that risk aversion is more than a simple parameter of economic models but it rather captures a more complex psychological primitive which is endogenous to many models describing decision-making process. However, the mixed evidence about the causes of risk attitudes that prevails in the literature suggests that models that consider only the environmental variation, when explaining attitudes toward risk, may not adequately capture the rather complex relationship between willingness to take risk, environmental exposures, and initial endowments. I propose a model that allows to test for individual heterogeneity in the responsiveness to environmental changes. I argue that the treatment heterogeneity may be one of the reasons for the inconclusive evidence in the literature.

To investigate the individual heterogeneity, I exploit recent advances in behavioral genetics and estimate a gene-environment model. To accomplish our goals, I use a representative sample of the US population born between 1929 and 1959 from the HRS data set. The data contain information about the risk aversion of the respondents and about their genetic endowment. As a measure of genetic risk the paper proposes to construct a polygenic score, a measure commonly used in the literature. I find that the responsiveness to adverse economic situations varies by genotype which implies that average treatment effect estimates of an environment depend on the genetic composition of the sample. Substantively, I find that experiences with adverse development on the labor market affect the risk attitudes only for the individuals with low genetic predispositions for risk taking. The results imply that adverse economic conditions can increase aversion towards risk taking for individuals with stronger genetic predispositions for risk aversion. At the same time I cannot reject the hypothesis that adverse economic conditions have any influence on people with higher genetic predispositions for risk taking.. This finding can ultimately lead to an increase in inequality in health, wealth, income and other outcomes related to risk attitudes.