MULTIPLE-REGRESSION ANALYSIS OF THE OCCUPATIONAL-STATUS OF TWINS - A COMPARISON OF ECONOMIC AND BEHAVIORAL-GENETICS MODELS

The purpose of this note is to compare the performance of the model of DeFries and Fulker [hereafter 'the DFF model'] with the conventional fixed effects model in the analysis of data on twins in the study of e conomic well-being. Unlike the fixed-effects model that has traditiona lly been estimated in the economics literature, the DFF model provides explicit controls for genetic and shared environmental factors, The w eight of the evidence from estimation of the two models considered is that the impact of education in Australia, fielding constant genetic a nd shared environmental factors, is of the same order of magnitude as that estimated in studies that do not take account of these factors: a t most ability and shared environmental factors contribute 1 to 2 perc entage points to the gross return to education. The similarity of the results computed for the different models employed is reassuring, and suggests that reliable controls for the omitted genetic and shared env ironment variables are obtained through these indirect methods.