Economic Preferences, Genes, and Childhood Disadvantage

Motivated by the Scarr–Rowe hypothesis—which suggests that the expression of genetic potential depends on early-life conditions—this paper investigates how a genetic predisposition toward success in education interacts with the childhood environment to shape economic preferences. Using incentivized experimental data from a representative sample of English adults over the age of 50, we find that a higher genetic propensity for educational success is associated with lower risk aversion and greater patience—but only among those who experienced more advantaged childhood environments. Among participants who experienced an adverse early-life environment, risk aversion increases with genetic resources, whereas the relationship between genetic resources and patience is significantly attenuated. These findings underscore the role of early-life conditions in moderating genetic influences on economic decision-making and suggest that environmental inequality can shape the realization of genetic potential, reinforcing patterns of social immobility. These findings further highlight concerns about the underutilization of potential due to constraints on household resources.