Wednesday, November 20, 2019

Does IQ do a better job of predicting income among younger or older adults?

We know that IQ only has a moderate correlation with income, and it looks like much of this is due to the fact that intelligent people are very diverse in terms of earnings: some are super rich but many aren't very interested in money and pursue other things. I, for example, don't make more than my dad who was a maintenance man and belonged to a union. I could have pursued high-paying business jobs like my brothers, but I was drawn to academics (unfortunately!).

But does the correlation vary with age? Perhaps the earning capacity that comes with IQ becomes more and more evident with the accumulation of years.

Using General Social Survey data, I calculated Pearson correlations between IQ and personal income. Here are the correlations by age group and gender:

Correlation between IQ and income

Ages  18-24  -.03
          25-34   .14
          35-44   .20
          45-54   .26
          55-64   .27

Smart men ages 18 to 24 actually make slightly less than their less intelligent counterparts. Smarter guys are more likely to be in college and thus not earning much money. But we can see the correlation grows with older age groups, and it peaks only in the decade before retirement age.

Ages  18-24   .03
          25-34   .20
          35-44   .20
          45-54   .22
          55-64   .24

We see the same basic trend with women.

These findings are consistent with individual difference research in general: Traits matter more over the long-term and less in any particular situation.

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