A large literature establishes that cognitive and non-cognitive skills are strongly correlated with educational attainment and professional achievement. Isolating the causal effects of these traits on career outcomes is complicated by reverse causality and selection issues.
We suggest a new approach: using within-family differences in the genetic tendency to exhibit the relevant traits as a source of exogenous variation. Genes are fixed over the life cycle and genetic differences between full siblings are random, making it possible to establish the causal effects of within-family variation in genetic tendencies.
We link genetic data from individuals in the Swedish Twin Registry to government registry data and find evidence for causal effects of the genetic predispositions towards cognitive skills, personality traits, and economic preferences on professional achievement and educational attainment. Our results also demonstrate that education and labor market outcomes are partially the result of a genetic lottery.
…We find strong evidence for a causal effect of the predisposition toward stronger cognitive skills on income, occupational status, and educational outcomes. We also find evidence for statistically-significant effects of the predispositions toward several non-cognitive traits: individuals who tend to be more risk seeking, mentally stable, and open tend to work in more prestigious occupations. The opposite is true for individuals with a tendency towards narcissism or discounting the future. A tendency towards being open and forward-looking also increases educational attainment (EA). Finally, we document large causal effects of the general genetic tendency towards higher EA on all the outcomes we study. This illustrates that success in education and professional careers is in part down to “genetic luck”. We also investigate heterogeneity in these effects by gender and socioeconomic status (SES) of the parents. We find some evidence of a stronger effect of the predisposition toward cognitive skills for high-SES individuals, in particular on educational outcomes. We also find that the effects of the genetic tendencies on income tend to be stronger for women, implying that gender differences in labor market outcomes are generally larger for less skilled individuals. The exception is the link between genetic tendencies and management positions: our results suggest that cognitive and non-cognitive skills strongly increase the likelihood for men to work in a management position but that effects are much weaker for women.
…The polygenic indices we use stem from the work of the Social Science Genetic Association Consortium (SSGAC) (Becker et al 2021).
…2.4 Sample: For the full-sample analyses looking at educational outcomes, we will limit the dataset to genotyped individuals born between 1934 and 1995 (that is, individuals who have likely completed their education) whom we can link to their parents’ records for the construction of the socioeconomic controls.13 This subsample contains 29,393 individuals. For the analyses looking at labor market outcomes, we will limit the dataset to individuals born between 1934 and 1990 (that is, individuals who have likely completed their education and worked for a few years). This subsample contains 25,515 individuals. For our causal analyses using within-family variation, we will limit the sample to complete sets of genotyped dizygotic twins. This sample contains 11,344 individuals (5,672 twin pairs) for the education analyses and 9,594 individuals (4,797 twin pairs) for the income analyses.
…The scaled estimates in Figure 2 show that the magnitudes of the effects are economically meaningful. A one-standard deviation difference in the cognitive performance PGI is associated with a roughly 10 percentage points increase in the likelihood of having graduated from university. The effect of math skills is roughly 5 percentage points. These 2 effects are estimated simultaneously, meaning that an individual with one-standard deviation higher cognitive performance and math skills is around 15 percentage points more likely to graduate from university. The effects of the statistically-significant non-cognitive traits (openness, narcissism, and time discounting as proxied by smoking) are similarly large. Finally, a one-standard deviation increase in the educational attainment PGI is associated with 0.4 to 0.6 additional years of education.
[Given the large sample size, it’d be better to skip the PGSes—which still capture so little of the genetics—and usesibling IBD or RDR to establish estimates of total causal effects.]
This study examined a model in which conscientiousness is related to net worth through its relationship with future planning, and in which general mental ability (GMA) moderates the effects of future planning on net worth. Data for this study were drawn from 1,135 participants in the National Survey of Midlife Development in the United States. Results from an analysis of conditional indirect effects suggest that conscientiousness shared a positive, indirect association with net worth through its relationship with future planning that was realized only for individuals higher in GMA. In contrast,conscientiousness had no indirect association with net worth for those low in GMA. This study helps add to the understanding of how noncognitive (personality) and cognitive (ability) traits affect individual-level economic outcomes and offers an explanation for both how and when conscientiousness influences net worth. These findings may be particularly important given efforts to design interventions that help improve individual financial outcomes.
We show that genetic endowments linked to educational attainment strongly and robustly predict wealth at retirement. The estimated relationship is not fully explained by flexibly controlling for education and labor income. We therefore investigate a host of additional mechanisms that could account for the gene-wealth gradient, including inheritances, mortality, risk preferences, portfolio decisions, beliefs about the probabilities of macroeconomic events, and planning horizons. We provide evidence that genetic endowments related to human capital accumulation are associated with wealth not only through educational attainment and labor income but also through a facility with complex financial decision-making.
Despite a longstanding expert consensus about the importance of cognitive ability for life outcomes, contrary views continue to proliferate in scholarly and popular literature. This divergence of beliefs among researchers, practitioners, and the general public presents an obstacle for evidence-based policy and decision-making in a variety of settings. One commonly held idea is that greater cognitive ability does not matter or is actually harmful beyond a certain point (sometimes stated as either 100 or 120 IQ points).
We empirically test these notions using data from 4 longitudinal, representative cohort studies comprising a total of 48,558 participants in the U.S. and U.K. from 1957 to the present.
We find that cognitive ability measured in youth has a positive association with most occupational, educational, health, and social outcomes later in life. Most effects were characterized by a moderate-to-strong linear trend or a practically null effect (mean R2 = 0.002 to 0.256). Although we detected several nonlinear effects, they were small in magnitude (mean incremental R2 = 0.001). We found no support for any detrimental effects of cognitive ability and no evidence for a threshold beyond which greater scores cease to be beneficial.
Thus, greater cognitive ability is generally advantageous—and virtually never detrimental.
Health and social scientists have documented the hospital revolving-door problem, the concentration of crime, and long-term welfare dependence. Have these distinct fields identified the same citizens? Using administrative databases linked to 1.7 million New Zealanders, we quantified and monetized inequality in distributions of health and social problems and tested whether they aggregate within individuals. Marked inequality was observed: Gini coefficients equalled 0.96 for criminal convictions, 0.91 for public-hospital nights, 0.86 for welfare benefits, 0.74 for prescription-drug fills and 0.54 for injury-insurance claims. Marked aggregation was uncovered: a small population segment accounted for a disproportionate share of use-events and costs across multiple sectors. These findings were replicated in 2.3 million Danes. We then integrated the New Zealand databases with the four-decade-long Dunedin Study. The high-need/high-cost population segment experienced early-life factors that reduce workforce readiness, including low education and poor mental health. In midlife they reported low life satisfaction. Investing in young people’s education and training potential could reduce health and social inequalities and enhance population wellbeing.
Evidence from different countries suggests that non-cognitive skills play an important role in wage determination and overall social outcomes, but studies for Canada are scarce. We contribute to filling this gap by estimating wage regressions with the Big Five traits using the Longitudinal and International Study of Adults. Our results indicate that conscientiousness is positively associated with wages, while agreeableness, extraversion, and neuroticism are associated with negative returns, with higher magnitudes on agreeableness and conscientiousness for females. Cognitive ability has the highest estimated wage return so, while substantial, non-cognitive skills do not seem to be the most important wage determinant.
[Keywords: management, labour market, returns to skills, non-cognitive skill, cognitive skill, wage regressions, personality traits, Five-Factor Model]
Recent research on the role of general mental ability (GMA) and specific abilities in work-related outcomes has shown that the results differ depending on the theoretical and conceptual approach that researchers use. While earlier research has typically assumed that GMA causes the specific abilities and has thus used incremental validity analysis, more recent research has explored the implications of treating GMA and specific abilities as equals (differing only in breadth and not subordination) and has used relative importance analysis. In this article, we extend this work to the prediction of extrinsic career success operationalized as pay, income, and the attainment of jobs with high prestige. Results, based on a large national sample, revealed that GMA and specific abilities measured in school were good predictors of job prestige measured after 11 years, pay measured after 11 years, and income 51 years later toward the end of the participants’ work lives. With 1 exception, GMA was a dominant predictor in incremental validity analyses. However, in relative importance analyses, the majority of the explained variance was explained by specific abilities, and GMA was not more important than single specific abilities in relative importance analyses. Visuospatial, verbal, and mathematical abilities all had substantial variance shares and were also more important than GMA in some of the analyses. Implications for the interpretation of cognitive ability data and facilitating people’s success in their careers are discussed.
Recent advances have led to the discovery of specific genetic variants that predict educational attainment. We study how these variants, summarized as a linear index—known as a polygenic score—are associated with human capital accumulation and labor market outcomes in the Health and Retirement Study (HRS). We present two main sets of results. First, we find evidence that the genetic factors measured by this score interact strongly with childhood socioeconomic status in determining educational outcomes. In particular, while the polygenic score predicts higher rates of college graduation on average, this relationship is substantially stronger for individuals who grew up in households with higher socioeconomic status relative to those who grew up in poorer households. Second, the polygenic score predicts labor earnings even after adjusting for completed education, with larger returns in more recent decades. These patterns suggest that the genetic traits that promote education might allow workers to better accommodate ongoing skill biased technological change. Consistent with this interpretation, we find a positive association between the polygenic score and non-routine analytic tasks that have benefited from the introduction of new technologies. Nonetheless, the college premium remains the dominant determinant of earnings differences at all levels of the polygenic score. Given the role of childhood SES in predicting college attainment, this raises concerns about wasted potential arising from limited household resources.
This paper estimates the effects of personality traits and IQ on lifetime earnings, both as a sum and individually by age.
The payoffs to personality traits display a concave life-cycle pattern, with the largest effects between the ages of 40 and 60.
The largest effects on earnings are found for Conscientiousness, Extraversion, and Agreeableness (negative).
An interaction of traits with education reveals that personality matters most for highly educated men.
The overall effect of Conscientiousness operates partly through education, which also has substantial returns.
This paper estimates the effects of personality traits and IQ on lifetime earnings of the men and women of the Terman study, a high-IQ U.S. sample. Age-by-age earnings profiles allow a study of when personality traits affect earnings most, and for whom the effects are strongest. I document a concave life-cycle pattern in the payoffs to personality traits, with the largest effects between the ages of 40 and 60. An interaction of traits with education reveals that personality matters most for highly educated men. The largest effects are found for Conscientiousness, Extraversion, and Agreeableness (negative), where Conscientiousness operates partly through education, which also has substantial returns.
[Keywords: Personality traits, Socio-emotional skills, Cognitive skills, Returns to education, Lifetime earnings, Big Five, Human capital, Factor analysis]
2018-coutrot.pdf: “Global Determinants of Navigation Ability”, Antoine Coutrot, Ricardo Silva, Ed Manley, Will de Cothi, Saber Sami, Véronique D. Bohbot, Jan M. Wiener, Christoph Hölscher, Ruth C. Dalton, Michael Hornberger, Hugo J. Spiers
Heterogeneity of household financial outcomes emerges from various individual and environmental factors, including personality, cognitive ability, and socioeconomic status (SES), among others. Using a genetically informative data set, we decompose the variation in financial management behavior into genetic, shared environmental and non-shared environmental factors. We find that about half of the variation in financial distress is genetically influenced, and personality and cognitive ability are associated with financial distress through genetic and within-family pathways. Moreover, the genetic influences of financial distress are highest at the extremes of SES, which in part can be explained by neuroticism and cognitive ability being more important predictors of financial distress at low and high levels of SES, respectively.
The educational, occupational, and creative accomplishments of the profoundly gifted participants (IQs ⩾ 160) in the Study of Mathematically Precocious Youth (SMPY) are astounding, but are they representative of equally able 12-year-olds? Duke University’s Talent Identification Program (TIP) identified 259 young adolescents who were equally gifted. By age 40, their life accomplishments also were extraordinary: Thirty-seven percent had earned doctorates, 7.5% had achieved academic tenure (4.3% at research-intensive universities), and 9% held patents; many were high-level leaders in major organizations. As was the case for the SMPY sample before them, differential ability strengths predicted their contrasting and eventual developmental trajectories—even though essentially all participants possessed both mathematical and verbal reasoning abilities far superior to those of typical Ph.D. recipients. Individuals, even profoundly gifted ones, primarily do what they are best at. Differences in ability patterns, like differences in interests, guide development along different paths, but ability level, coupled with commitment, determines whether and the extent to which noteworthy accomplishments are reached if opportunity presents itself.
Policy-makers are interested in early-years interventions to ameliorate childhood risks. They hope for improved adult outcomes in the long run, bringing return on investment. How much return can be expected depends, partly, on how strongly childhood risks forecast adult outcomes. But there is disagreement about whether childhood determines adulthood. We integrated multiple nationwide administrative databases and electronic medical records with the four-decade Dunedin birth-cohort study to test child-to-adult prediction in a different way, by using a population-segmentation approach. A segment comprising one-fifth of the cohort accounted for 36% of the cohort’s injury insurance-claims; 40% of excess obese-kilograms; 54% of cigarettes smoked; 57% of hospital nights; 66% of welfare benefits; 77% of fatherless childrearing; 78% of prescription fills; and 81% of criminal convictions. Childhood risks, including poor age-three brain health, predicted this segment with large effect sizes. Early-years interventions effective with this population segment could yield very large returns on investment.
Background: Results from previous studies show that the cognitive ability of offspring might be irreversibly damaged as a result of their mother’s mild iodine deficiency during pregnancy. A reduced intelligence quotient (IQ) score has broad economic and societal cost implications because intelligence affects wellbeing, income, and education outcomes. Although pregnancy and lactation lead to increased iodine needs, no UK recommendations for iodine supplementation have been issued to pregnant women. We aimed to investigate the cost-effectiveness of iodine supplementation versus no supplementation for pregnant women in a mildly to moderately iodine-deficient population for which a population-based iodine supplementation programme—for example, universal salt iodisation—did not exist.
Methods: We systematically searched MEDLINE, Embase, EconLit, andNHS EED for economic studies that linked IQ and income published in all languages until Aug 21, 2014. We took clinical data relating to iodine deficiency in pregnant women and the effect on IQ in their children aged 8–9 years from primary research. A decision tree was developed to compare the treatment strategies of iodine supplementation in tablet form with no iodine supplementation for pregnant women in the UK. Analyses were done from a health service perspective (analysis 1; taking direct health service costs into account) and societal perspective (analysis 2; taking education costs and the value of an IQ point itself into account), and presented in terms of cost (in sterling, relevant to 2013) per IQ point gained in the offspring. We made data-supported assumptions to complete these analyses, but used a conservative approach that limited the benefits of iodine supplementation and overestimated its potential harms.
Findings: Our systematic search identified 1361 published articles, of which eight were assessed to calculate the monetary value of an IQ point. A discounted lifetime value of an additional IQ point based on earnings was estimated to be £3297 (study estimates range from £1319 to £11 967) for the offspring cohort. Iodine supplementation was cost saving from both a health service perspective (saving £199 per pregnant woman [sensitivity analysis range –£42 to £229]) and societal perspective (saving £4476 per pregnant woman [sensitivity analysis range £540 to £4495]), with a net gain of 1·22 IQ points in each analysis. Base case results were robust to sensitivity analyses.
Interpretation: Iodine supplementation for pregnant women in the UK is potentially cost saving. This finding also has implications for the 1·88 billion people in the 32 countries with iodine deficiency worldwide. Valuation of IQ points should consider non-earnings benefits—eg, health benefits associated with a higher IQ not germane to earnings.
Cross-regional correlations between average IQ and socioeconomic development have been documented in many different countries. This paper presents new IQ estimates for the twelve regions of the UK. These are weakly correlated (r = 0.24) with the regional IQs assembled by Lynn (1979). Assuming the two sets of estimates are accurate and comparable, this finding suggests that the relative IQs of different UK regions have changed since the 1950s, most likely due to differentials in the magnitude of the Flynn effect, the selectivity of external migration, the selectivity of internal migration or the strength of the relationship between IQ and fertility. The paper provides evidence for the validity of the regional IQs by showing that IQ estimates for UK nations (England, Scotland, Wales and Northern Ireland) derived from the same data are strongly correlated with national PISA scores (r = 0.99). It finds that regional IQ is positively related to income, longevity and technological accomplishment; and is negatively related to poverty, deprivation and unemployment. A general factor of socioeconomic development is correlated with regional IQ atr = 0.72.
One of the best predictors of children’s educational achievement is their family’s socioeconomic status (SES), but the degree to which this association is genetically mediated remains unclear. For 3000 UK-representative unrelated children we found that genome-wide single-nucleotide polymorphisms could explain a third of the variance of scores on an age-16 UK national examination of educational achievement and half of the correlation between their scores and family SES. Moreover, genome-wide polygenic scores based on a previously published genome-wide association meta-analysis of total number of years in education accounted for ~3.0% variance in educational achievement and ~2.5% in family SES. This study provides the first molecular evidence for substantial genetic influence on differences in children’s educational achievement and its association with family SES.
This study examines changes in returns to formal education and cognitive skills over the past 20 years using the 1979 and 1997 waves of the National Longitudinal Survey of Youth. We show that cognitive skills had a 30%–50% larger effect on wages in the 1980s than in the 2000s. Returns to education were higher in the 2000s. These developments are not explained by changing distributions of workers’ observable characteristics or by changing labor market structure. We show that the decline in returns to ability can be attributed to differences in the growth rate of technology between the 1980s and 2000s.
Environmental measures used widely in the behavioral sciences show nearly as much genetic influence as behavioral measures, a critical finding for interpreting associations between environmental factors and children’s development. This research depends on the twin method that compares monozygotic and dizygotic twins, but key aspects of children’s environment such as socioeconomic status (SES) cannot be investigated in twin studies because they are the same for children growing up together in a family. Here, using a new technique applied to DNA from 3000 unrelated children, we show significant genetic influence on family SES, and on its association with children’s IQ at ages 7 and 12. In addition to demonstrating the ability to investigate genetic influence on between-family environmental measures, our results emphasize the need to consider genetics in research and policy on family SES and its association with children’s IQ.
Youth identified before age 13 (n = 320) as having profound mathematical or verbal reasoning abilities (top 1 in 10,000) were tracked for nearly three decades. Their awards and creative accomplishments by age 38, in combination with specific details about their occupational responsibilities, illuminate the magnitude of their contribution and professional stature.
Many have been entrusted with obligations and resources for making critical decisions about individual and organizational well-being. Their leadership positions in business, health care, law, the professoriate, and STEM (science, technology, engineering, and mathematics) suggest that many are outstanding creators of modern culture, constituting a precious human-capital resource. Identifying truly profound human potential, and forecasting differential development within such populations, requires assessing multiple cognitive abilities and using atypical measurement procedures.
This study illustrates how ultimate criteria may be aggregated and longitudinally sequenced to validate such measures.
[Keywords: cognitive abilities, creativity, human capital, intelligence, profoundly gifted, STEM]
Are the American elite drawn from the cognitive elite? To address this, five groups of America’s elite (total N = 2254) were examined: Fortune 500 CEOs, federal judges, billionaires, Senators, and members of the House of Representatives. Within each of these groups, nearly all had attended college with the majority having attended either a highly selective undergraduate institution or graduate school of some kind. High average test scores required for admission to these institutions indicated those who rise to or are selected for these positions are highly filtered for ability. Ability and education level differences were found across various sectors in which the billionaires earned their wealth (eg., technology vs. fashion and retail); even within billionaires and CEOs wealth was found to be connected to ability and education. Within the Senate and House, Democrats had a higher level of ability and education than Republicans. Females were underrepresented among all groups, but to a lesser degree among federal judges and Democrats and to a larger degree among Republicans and CEOs. America’s elite are largely drawn from the intellectually gifted, with many in the top 1% of ability.
We analyze the effects of cognitive abilities [AFQT] on two examples of consumer financial decisions where suboptimal behavior is well defined. The first example features the optimal use of credit cards for convenience transactions after a balance transfer and the second involves a financial mistake on a home equity loan application. We find that consumers with higher overall test scores, and specifically those with higher math scores, are substantially less likely to make a financial mistake. These mistakes are generally not associated with nonmath test scores.
We analyze whether IQ influences trading behavior, performance, and transaction costs. The analysis combines equity return, trade, and limit order book data with two decades of scores from an intelligence (IQ) test administered to nearly every Finnish male of draft age. Controlling for a variety of factors, we find that high-IQ investors are less subject to the disposition effect, more aggressive about tax-loss trading, and more likely to supply liquidity when stocks experience a one-month high. High-IQ investors also exhibit superior market timing, stock-picking skill, and trade execution.
Traditional economic theories stress the relevance of political, institutional, geographic, and historical factors for economic growth. In contrast, human-capital theories suggest that peoples’ competences, mediated by technological progress, are the deciding factor in a nation’s wealth.
Using 3 large-scale assessments, we calculated cognitive-competence sums for the mean and for upper-level & lower-level groups for 90 countries and compared the influence of each group’s intellectual ability on gross domestic product. In our cross-national analyses, we applied different statistical methods (path analyses, bootstrapping) and measures developed by different research groups to various country samples and historical periods.
Our results underscore the decisive relevance of cognitive ability—particularly of an intellectual class with high cognitive ability and accomplishments in science, technology, engineering, and math—for national wealth. Furthermore, this group’s cognitive ability predicts the quality of economic and political institutions, which further determines the economic affluence of the nation. Cognitive resources enable the evolution of capitalism and the rise of wealth.
This paper estimates the internal rate of return (IRR) to education for men and women of the Terman sample, a 70-year long prospective cohort study of high-ability individuals. The Terman data is unique in that it not only provides full working-life earnings histories of the participants, but it also includes detailed profiles of each subject, including IQ and measures of latent personality traits. Having information on latent personality traits is important as it allows us to measure the importance of personality on educational attainment and lifetime earnings.
Our analysis addresses two problems of the literature on returns to education: First, we establish causality of the treatment effect of education on earnings by implementing generalized matching on a full set of observable individual characteristics and unobserved personality traits. Second, since we observe lifetime earnings data, our estimates of the IRR are direct and do not depend on the assumptions that are usually made in order to justify the interpretation of regression coefficients as rates of return.
For the males, the returns to education beyond high school are sizeable. For example, the IRR for obtaining a bachelor’s degree over a high school diploma is 11.1%, and for a doctoral degree over a bachelor’s degree it is 6.7%. These results are unique because they highlight the returns to high-ability and high-education individuals, who are not well-represented in regular data sets.
Our results highlight the importance of personality and intelligence on our outcome variables. We find that personality traits similar to the Big Five personality traits are statistically-significant factors that help determine educational attainment and lifetime earnings. Even holding the level of education constant, measures of personality traits have statistically-significant effects on earnings. Similarly, IQ is rewarded in the labor market, independently of education. Most of the effect of personality and IQ on life-time earnings arise late in life, during the prime working years. Therefore, estimates from samples with shorter durations underestimate the treatment effects.
The role of improved schooling, a central part of most development strategies, has become controversial because expansion of school attainment has not guaranteed improved economic conditions. This paper reviews the role of cognitive skills in promoting economic well-being, with a particular focus on the role of school quality and quantity. It concludes that there is strong evidence that the cognitive skills of the population—rather than mere school attainment—are powerfully related to individual earnings, to the distribution of income, and to economic growth. New empirical results show the importance of both minimal and high level skills, the complementarity of skills and the quality of economic institutions, and the robustness of the relationship between skills and growth. International comparisons incorporating expanded data on cognitive skills reveal much larger skill deficits in developing countries than generally derived from just school enrollment and attainment. The magnitude of change needed makes clear that closing the economic gap with developed countries will require major structural changes in schooling institutions.
I show that in a conventional Ramsey model, between one-fourth and one-half of the global income distribution can be explained by a single factor: The effect of large, persistent differences in national average IQ on the private marginal product of labor. Thus, differences in national average IQ may be a driving force behind global income inequality. These persistent differences in cognitive ability—which are well-supported in the psychology literature—are likely to be somewhat malleable through better health care, better education, and especially better nutrition in the world’s poorest countries. A simple calibration exercise in the spirit of Bils and Klenow (2000) and Castro (2005) is conducted. I show that an IQ-augmented Ramsey model can explain more than half of the empirical relationship between national average IQ and GDP per worker. I provide evidence that little of the IQ-productivity relationship is likely to be due to reverse causality.
Human capital plays an important role in the theory of economic growth, but it has been difficult to measure this abstract concept. We survey the psychological literature on cross-cultural IQ tests and conclude that intelligence tests provide one useful measure of human capital. Using a new database of national average IQ, we show that in growth regressions that include only robust control variables, IQ is statistically-significant in 99.8% of these 1330 regressions, easily passing a Bayesian model-averaging robustness test. A 1 point increase in a nation’s average IQ is associated with a persistent 0.11% annual increase in GDP per capita.
In this study we quantify economic benefits from projected improvements in worker productivity resulting from the reduction in children’s exposure to lead in the United States since 1976. We calculated the decline in blood lead levels (BLLs) from 1976 to 1999 on the basis of nationally representative National Health and Nutrition Examination Survey (NHANES) data collected during 1976through 1980, 1991 through 1994, and 1999. The decline in mean BLL in 1- to 5-year-old U.S. children from 1976-1980 to 1991-1994 was 12.3 microg/dL, and the estimated decline from 1976 to 1999 was 15.1 microg/dL. We assumed the change in cognitive ability resulting from declines in BLLs, on the basis of published meta-analyses, to be between 0.185 and 0.323 IQ points for each 1 g/dL blood lead concentration. These calculations imply that, because of falling BLLs, U.S. preschool-aged children in the late 1990s had IQs that were, on average, 2.2-4.7 points higher than they would have been if they had the blood lead distribution observed among U.S. preschool-aged children in the late 1970s. We estimated that each IQ point raises worker productivity 1.76-2.38%. With discounted lifetime earnings of $723,300 for each 2-year-old in 2000 dollars, the estimated economic benefit for each year’s cohort of 3.8 million 2-year-old children ranges from $110 billion to $319 billion.
This paper explores the effects of peers, friends, family, IQ and academic performance, observed in the last year of high school, on earnings at ages 35 and 53. All statistically-significantly affect earnings at both ages. The effects of IQ are much smaller than asserted in, for example, The Bell Curve, and badly overstated in the absence of controls for family, wider context or academic performance. Aspirations appear to be very important. Socialization and role models may be as well, but not ability spillovers. Feasible increases in academic performance and education can compensate for the effects of many cognitive and contextual deficits. [This paper exemplifies the fallacy of controlling for intermediate variables—as if all those “controls” had nothing to do with IQ causing earnings! —Editor]
Personnel selection research provides much evidence that intelligence (g) is an important predictor of performance in training and on the job, especially in higher level work. This article provides evidence that g has pervasive utility in work settings because it is essentially the ability to deal with cognitive complexity, in particular, with complex information processing. The more complex a work task, the greater the advantages that higher g confers in performing it well. Everyday tasks, like job duties, also differ in their level of complexity. The importance of intelligence therefore differs systematically across different arenas of social life as well as economic endeavor. Data from the National Adult Literacy Survey are used to show how higher levels of cognitive ability systematically improve individual’’s odds of dealing successfully with the ordinary demands of modern life (such as banking, using maps and transportation schedules, reading and understanding forms, interpreting news articles). These and other data are summarized to illustrate how the advantages of higher g, even when they are small, cumulate to affect the overall life chances of individuals at different ranges of the IQ bell curve. The article concludes by suggesting ways to reduce the risks for low-IQ individuals of being left behind by an increasingly complex postindustrial economy.
While sophistication in public health research has been increasing substantially in the past few decades, sophistication in decision making about public health and environmental issues has not been increasing in parallel. Measures that are inexpensive tend to be implemented and measures that are expensive tend not to be implemented by makers of public policy. That is often independent of the degree of public health protection afforded by the measures. Understanding and addressing this pattern is crucial to the control of lead exposure of critical populations. People are still exposed to lead in our society not because anyone believes that exposure is good, but because reducing exposure costs money. Maintaining exposure also has its costs, however. It is more difficult to measure them, and they are often ignored in decision making—but they are not small, and attempts to measure them have been made. The high cost of reducing lead exposure of critical populations is the reason that progress in reducing lead-paint exposure has been minimal in the 18 years since the passage of the Lead-Based Paint Poisoning Prevention Act and that it took from the time of the initial proposal in 1973 until 1986 before lead was substantially eliminated from gasoline. In its 1986 rule making, the EPA estimated that the elimination of lead from gasoline would cost more than $1,389$5001986 million per year. Removing leaded paint is estimated to cost billions of dollars. The difference is that the EPA promulgated its rule of removing lead fromgasoline, whereas HUD has had little success in removing leaded paintfrom housing. One reason that the EPA was successful in implementing such an expensive regulation was that it provided detailed estimates of the health and welfare benefits that would accrue and the monetary value of some of the benefits. The EPA cost-benefit analysis demonstrated that the monetary benefits of its regulation far exceeded the costs. That neutralized the cost issue and focused the debate over the regulation on questions of timing. A detailed benefit analysis of reducing lead in drinking water has caused the EPA to consider tighter water lead standards than initially envisioned. Despite years of concern about the consequences of leaded paint poisoning, children continue to be poisoned by leaded paint because it will cost billions of dollars to abate the hazard, and demand for these dollars has lost out to competing needs. As long as attention focuses on the costs of lead-paint abatement and ignores the costs of not abating and as long as people add up the costs of removing paint but not the costs of medical care, compensatory education, and school dropouts, substantial action is unlikely. It is possible that a detailed benefit analysis of lead-paint removal will not show that benefits exceed the costs, but we think it unlikely, given the large benefits estimated for other programs that reduce lead exposure, that a cost-beneficial removal strategy cannot be found. If no attempt is made to estimate the benefits, this strategy is less likely to be adopted. This paper cannot reasonably estimate the costs and benefits of the many measures that are available to reduce lead exposure of critical populations. It can, however, describe the methods that have been used and present a prototypical analysis that can readily be adapted to develop analyses specific to individual actions.
It is well-known that some workers in scientific research laboratories are enormously more creative than others. If the number of scientific publications is used as a measure of productivity, it is found that some individuals create new science at a rate at least 50× greater than others. Thus differences in rates of scientific production are much bigger than differences in the rates of performing simpler acts, such as the rate of running the mile, or the number of words a man can speak per minute. On the basis of statistical studies of rates of publication, it is found that it is more appropriate to consider not simply the rate of publication but its logarithm. The logarithm appears to have a normal distribution over the population of typical research laboratories. The existence of a “log-normal distribution” suggests that the logarithm of the rate of production is a manifestation of some fairly fundamental mental attribute. The great variation in rate of production from one individual to another can be explained on the basis of simplified models of the mental processes concerned. The common feature in the models is that a large number of factors are involved so that small changes in each, all in the same direction, may result in a very large [multiplicative] change in output. For example, the number of ideas a scientist can bring into awareness at one time may control his ability to make an invention and his rate of invention may increase very rapidly with this number.
The distribution of intelligence as measured by recognized scales supplemented by other information conforms closely to the normal curve of error, while that of personal income presents a highly skewed J-shaped curve. Reconciliation of this apparent discrepancy can be made by regarding income as dependent mainly on output, which in turn is related to the contributing abilities by some special function. Confirmation of this theory appears in the fact that in many intellectual fields the distribution of output approaches the J-shaped curve. The inequality in personal income is largely, though not entirely, an indirect effect of the inequality in innate intelligence. Yet mental output and achievement are undoubtedly influenced by differences in social and economic conditions. This is instanced by the fact that in assessing the influence of innate ability and parental income upon entrance to the universities, it appears from statistical analysis that of the ex-elementary (non-fee-paying) group about 40% of those possessing the necessary intelligence fail to obtain a university education. On the other hand, an equal number of children whose parents pay for their early instruction receive a university education for which their innate abilities alone scarcely equip them.