BY BRUCE SACERDOTE QUARTERLY JOURNAL OF ECONOMICS, 2007 How Large Are the Effects from Changes in Family Environment? A Study of Korean American Adoptees

Central Question What role does family environment (nurture) play in determining child outcomes? Approach: Use a “natural experiment” that we would never be able to do—randomly assign kids into families.

Korean-American Adoptees: The Holt Sample Children placed by Holt International Children’s Services from “Quasi” randomly assigned to families Children from foster homes in Korea, where they were typically placed due to unwed motherhood or inability to care for child

Korean-American Adoptees: Sacerdote’s Survey Target parents of adoptees ages in 2004 (and their siblings). Advantages: Disadvantages:

What can this study tell us about nature vs. nurture? Adoptees allow us to look at effect of nurture in the absence of nature. Sacerdote’s contributions: 1. Known and random assignment process 2. Use of behavioral genetics model 3. Lots of different outcomes 4. Estimates effect of assignment to small, high-ed family

Estimation: Variance Decomposition Behavioral genetics model, using variance decomposition Where G = genetics F = family environment S = separate environment Take the variance of both sides: Correlation in outcomes between two adoptive siblings comes only from F. Correlation in outcomes between two biological siblings comes from G and F.

Estimation: Other Techniques 1. Treatment Effects—compare those kids randomly assigned to small, high-SES families to kids assigned to large, low-SES families. 2. Transmission coefficients—what is the correlation between parents’ outcomes and kids’ outcomes?

Table 2

Results: Figure II

Results: Figure III

Results: Variance Decomposition

“A family environment share of 13 percent can lead to large effects on children’s outcomes from changes in children’s family environment.” Explains more of the variation in graduating from a ranked college than in graduating from any college. Drinking behavior driven by family environment Weight, BMI driven by genetics Sacerdote’s interpretation:

Treatment Effects Results Mother’s education and family size have a large effect on the adoptees’ years of education and college status. Income does not matter much. → Implies that parental attention matters more than income. Assignment to a small, high education family relative to a lesser educated, large family increases educational attainment by.75 years and increases the prob. of graduating from college by 16.1 percentage points. Huge impact on prob. of graduating from a ranked college.

Transmission Results “For the measured transmission of education from mothers to children, roughly 28 percent of this is working directly through nurture.” Results for weight, height, drinking similar to before.

Effect of assignment to high-ed, small family much larger than effects of tuition programs, Catholic schools. The black-white gap in education is equivalent to about a one SD move in the index of family environment. Questions: How convincing is this study? How would you extend it? What do we “do” with this? Discussion

Bjorklund, Lindahl, & Plug, Table II

Bjorklund, Lindahl, & Plug, Table IV