Socioeconomic Status and Inequalities in Children’s IQ and Economic Preferences

By Armin Falk, Fabian Kosse, Pia R. Pinger, Hannah Schildberg-Hörisch, Thomas Deckers. Journal of Political Economy, 2017

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This paper explores inequalities in IQ and economic preferences between children from families of high and low socioeconomic status (SES). We document that children from high-SES families are more intelligent, patient, and altruistic as well as less risk seeking. To understand the underlying mechanisms, we propose a framework of how SES, parental investments, as well as maternal IQ and preferences influence a child’s IQ and preferences. Our results indicate that disparities in the level of parental investments hold substantial importance. In light of the importance of IQ and preferences for behaviors and outcomes, our findings offer an explanation for social immobility.

Subfields: Experimental and Cognitive Psychology, Pediatrics, Perinatology and Child Health, Sociology and Political Science

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