Understanding Heterogeneity in the Effects of Birth Weight on Adult Cognition and Wages

Abstract

A large economics literature has shown long term impacts of birth weight on adult outcomes, including IQ and earnings that are often robust to sibling or twin fixed effects. We examine potential mechanisms underlying these effects by incorporating findings from the genetics and neuroscience literatures. We use a sample of siblings combined with an “orchids and dandelions hypothesis”, where the IQ of genetic dandelions is not affected by in utero nutrition variation but genetic orchids thrive under advantageous conditions and wilt in poor conditions. Indeed, using variation in three candidate genes related to neuroplasticity (APOE, BDNF, and COMT), we find substantial heterogeneity in the associations between birth weight and adult outcomes, where part of the population (i.e., “dandelions”) is not affected by birth weight variation. Our results help uncover why birth weight affects adult outcomes.