Abstract
Returns to education have long been a central focus of social science research due to their implications for productivity, social mobility, and inequality. A persistent challenge in this literature is the inability to fully account for heterogeneity in skills and initial endowments, which may confound estimates of causal returns. This paper addresses this limitation by incorporating genetic information---specifically, the Educational Attainment Polygenic Index (EA PGI)---to study the role of genetic predisposition in shaping the returns to education. We exploit the mid-20th-century expansion of university access in the United Kingdom and use the measured reduction in distance to the nearest university as an instrument for college attainment. Preliminary findings point to two main results: (1) the EA PGI is positively associated with wages; and (2) this association is stronger among individuals without a college degree, suggesting a negative gene-environment interaction. That is, higher education appears to reduce the influence of genetic predisposition on earnings, consistent with the interpretation that it mitigates genetic inequality. We then deconstruct these findings by building on the Marginal Treatment Effects (MTE) framework. We propose a decomposition of treatment effect heterogeneity that distinguishes between gene-environment interaction (GxE)---differences in returns across genotypes---and gene-environment correlation (rGE)---the influence of genetic predisposition on selection into treatment. This approach enables us to isolate the distinct pathways through which genetic factors shape the observed returns to education.