Leandro S. Carvalho

Childhood Circumstances and the Intergenerational Transmission of Socioeconomic Status

A large literature has documented the intergenerational transmission of socioeconomic status (SES). However, the mechanisms by which SES transmits across generations are still little understood. This article investigates whether characteristics determined in childhood play an important role in the intergenerational transmission. Using data from the Cebu Longitudinal Health and Nutrition Survey, I document the extent to which childhood human capital accounts for the intergenerational SES correlation. My results imply that childhood health and nutrition, cognitive and noncognitive abilities, and early schooling account for between one-third and one-half of the relationship between parents’ SES and their offspring’s SES.

Poverty and Time Preference

This paper estimates the time preference of poor households in rural Mexico. It uses data from a program that randomly assigned communities to treatment and control and paid transfers to poor households in treatment communities. The randomization implies that differences in consumption between control and treatment households are due to the program. A buffer-stock model predicts how the response of consumption to transfers depends on the discount factor. It estimates this parameter by matching simulated to sample treatment effects on consumption. The estimates being very low, it concludes that poor households are very impatient or a richer model is needed.

Cognitive Ability, Expectations, and Beliefs About the Future: Psychological Influences on Retirement Decisions

Recent advances in behavioral decision research, behavioral economics, and life-span development psychology provide leverage for expanding our understanding of the decision to retire earlier versus later. This report examines how cognitive abilities, perceptions about the future, and other psychological characteristics affect retirement decisions. We use existing and new data collected through the RAND-USC American Life Panel, including detailed assessments of fluid and crystallized intelligence, financial literacy, expectations for the future, future time perspective, and maximizing versus satisficing decision styles. We find those with high levels of cognitive ability are more likely to retire later, as are those with greater longevity expectations. We also find those with lower cognitive ability have less coherent expectations of retirement—suggesting a need for planning assistance. We also find expectation of lower Social Security benefits is associated with plans to retire later—contrary to our hypothesis that such expectation might spur early retirement in an effort to lock in benefits. Finally, we find that tendencies maximize (versus satisfice) had mixed effects on retirement decision making, with different aspects of maximizing tendencies showing different relationships with retirement decision making. Future work should expand these data in a targeted direction. Recent research notes that decision-making competence can be improved with training, and to the extent this trainability extends to older adults, decision skills may be a useful target for intervention. Stronger longitudinal design and analysis can also help demonstrate possible endogenities between retirement and psychological variables.

Education can Reduce Health Disparities Related to Genetic Risk of Obesity: Evidence from a British Reform

This paper investigates whether genetic makeup moderates the effects of education on health. Low statistical power and endogenous measures of environment have been obstacles to the credible estimation of such gene-by-environment interactions. We overcome these obstacles by combining a natural experiment that generated variation in secondary education with polygenic scores for a quarter million individuals. The additional schooling affected body size, lung function, and blood pressure in middle age. The improvements in body size and lung function were larger for individuals with high genetic predisposition to obesity. As a result, education reduced the gap in unhealthy body size between those with high and low genetic risk of obesity from 20 to 6 percentage points.

Education can reduce health differences related to genetic risk of obesity

Significance Educational policies may increase or decrease health differences, depending on whether they reinforce or counteract gene-related differences. We investigate whether one such policy affected health differently for people with different genetic backgrounds. We find that the additional education generated by the policy benefited those with higher genetic risk of obesity the most, reducing the gap in unhealthy body size between those in the top and bottom terciles of genetic risk of obesity from 20 to 6 percentage points. Our results challenge the notion of genetic determinism and underscore the role that social policy can have in mitigating possible health differences arising from genetic background. This work investigates whether genetic makeup moderates the effects of education on health. Low statistical power and endogenous measures of environment have been obstacles to the credible estimation of such gene-by-environment interactions. We overcome these obstacles by combining a natural experiment that generated variation in secondary education with polygenic scores for a quarter-million individuals. The additional schooling affected body size, lung function, and blood pressure in middle age. The improvements in body size and lung function were larger for individuals with high genetic predisposition to obesity. As a result, education reduced the gap in unhealthy body size between those in the top and bottom terciles of genetic risk of obesity from 20 to 6 percentage points.