Do Children’s Genetic Differences Change Their Parents’ Economic Outcomes? Insights from Norway

Traditional perspectives emphasize a unidirectional link between parental economic outcomes and child traits, but effects could be bidirectional; child behavioral or health-related traits might elicit caregiving and practical demands that affect parents’ economic outcomes heterogenously. Advances in genomics enable testing this reverse causal pathway by leveraging the random allocation of alleles from parents to offspring. First, we linked ~28,000 genotyped parent-offspring trios from the Norwegian Mother, Father and Child Cohort to yearly registry data on parental labor income, net wealth, and government transfers from three years before to fifteen years after birth. Second, we estimated the overall impact of the first child in the genotyped sample using event studies. Third, we estimated the impact of common genetic variation in children on parental economic outcomes. We used relatedness disequilibrium regression to estimate the total effect of children’s genetic differences and within-family polygenic index models to test particular child genetic dispositions. Event studies show a larger impact associated with child birth for maternal outcomes compared to paternal outcomes. The genetically informed methods yielded inconclusive statistical evidence of child-driven genetic effects on parental economic outcomes. Translating effect sizes into practical terms, a child one standard deviation above the mean on a relevant genetic trait would be expected to reduce the parental “child penalty” by near zero at the confidence interval lower bound and roughly 40% at the upper confidence interval bound. Although mitigation of effects by the Norwegian welfare state is likely, both null and moderate effects remain plausible, warranting further investigation. In this exploratory study, we provide a novel foundation for future research on child-driven economic effects and how institutions limit their impact.