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June 22, 2006

Comments

I don't deny that being smart is pretty useless (heck, it hasn't gotten me anywhere), just that that's necessarily shown by this particular set of data. You've got pretty high p-values there, and if anything it shows that being stupid will hurt you but being smart won't help.

Your earlier posts about the marketing economy are spot-on: the US knows how to sell, that's what we do best, at least at the present time. (I wouldn't rule out China and India figuring that out eventually too.) And all the highest paying jobs are sales jobs, except for specialty surgery. And we all know about smart people with no social skills not making money. If I ever have kids I'm going to be a lot more worried about their popularity than their grades.

Or, to quote the old saw making fun of the Black Pride bit, the smarter the berry the sweeter the juice, but if you too damn smart it ain't no use.

SciFiGeek, yes, you are right on target with your comments.

Intelligence will help you get onto a certain "track," (via educational credentials), but once your on the track, popularity and not intelligence is what's important to moving ahead on the track.

And some intelligent people will pick dumb tracks like journalism or trying to be a college professor.

Excellent point, and reading your comments gave me an idea why.

Probably a lot of people would be popular on a college faculty or in a newsroom but not at a corporation. (A lot of these people are lefties.) So if you know you wouldn't fit in in Corporate America it might seem like a reasonable thing to do.

The problem is that there are so few jobs in academia and journalism that even so you're better off making feeble attempts to fit into Corporate America. You won't get far but at least you'll get a job.

I added an additional section to the above post about the problems of using a vocabulary test. I think it helps to explain some of the mystery.

Couple of points:

- this result is still consistent with the idea that there is some unaccounted for factor (industriousness, ambition or whatever), not captured in the data, which helps both in obtaining a degree and in succeeding in the working world. You could also postulate that it's the connections made at college (not the value placed on the credential per se) that result in increased income for college grads.

Your note that being black is not correlated with lower income only applies if you control for the other factors, I assume? I.e. black people with degree X or black people with WORDSUM Y have equivalent incomes to others with the same? Otherwise it would be an astonishing result...

Correct, after the other factors in the regression analysis are accounted for, including degree and score on the vocabulary test, being black doesn't have a statistically significant effect on income.

But it should be noted that blacks are two and a half times more likely to be in the WORDSUM(0-3) category as whites, and being in that category has a relatively large negative impact on income (but not quite as large as the impact caused by not having a high school degree or a college degree).

I bet if you separated male data from female, you'd find a lot more women underachieving in income for their IQs, especially as they get older.

The popularity theory sounds right, but I'll bet 95 percent of that quotient depends not on how you act, but who and what you are -- your background, gender, race, a modicum of attractiveness. Easy to be sociable when you're around people just like you.

You're probably right about the comparable profitability of feebly attempting to fit in, assuming one can at least get in the door (my own feeble attempts bear this out). The problem is that most of "corporate America" might as well be the Congo for most college students outside a certain elite sliver, especially outside the East Coast. Like, until my mid-20s I thought being a banker meant being a teller. I bet most guidance counselors think the same thing. And, the people you see who were good at math end up being math teachers or public engineers -- decent jobs, but the prospect won't sway kids from the creative stuff.

On the other hand, the average student schmoe spends lots of time with college professors, and sees reporters on TV all the time. Professors like their jobs, so they're never going to let on that people from their school have no shot in certain crowded fields. So, it's not so much making dumb choices as simply not knowing the profitable choices.

Nancy, SEX(d:1) is in both regressions, and that represnts a male respondent, and you see a big positive impact on income from being male.

It's capturing the male tendency to (1) enter higher paying professiosn like engineering or computers; and (2) focus more on work and less on other competing areas such as child rearing.

I agree with you that middle class people are at a disadvantage if they choose to enter an upper middle class profession. Most choose practical middle class professions like engineering--you rarely see an upper middle class kid majoring in engineering.

Outside of Manhattan, a lot of corporate offices are very middle class-friendly. For example, there was a relatively senior manager at a company I worked at who chewed tobacco at work.

Everyone familiar with the IQ literature seems to somehow take it for granted that high IQ causes higher income independent of educational credentials. . . In fact, the literature doesn’t say this

Umm. . . no. In fact, it most certainly does say this. Please don't make smug assertions like this about a literature you are not familiar with. Nothing is being "taken for granted", there are a number of papers that have tested these ideas on larger, better data sets; IQ always plays a role over and above education, at every occupational level. look at the summary and path analysis in Jencks (1972) or the partial correlations in Bajema (1968) and Waller (1971). See this paper for a modern look in the NLSY.

And for the love of God, try actually doing some minimum research before you go making bold proclamations about what the "literature doesn’t say".

Jason, 3,747 cases is a decent sized data set, and I got the same results on two separate datasets. The finding that high verbal IQ has no effect on income after education is accounted for is the real finding.

Now it's possible that the selection method for the GSS favors people who make unusually low salaries for their high IQ. I also explained above why using verbal ability may cause a problem.

However, in Charles Murray's paper, which you sent me the link to, he says that the primary means that IQ causes higher income is through educational credentials.

He also purposely avoids telling us how IQ affects income after education is accounted for, obviously because it would weaken his point that IQ matters. And I'm not saying it doesn't matter, just that it doesn't matter with respect to income after education is accounted for, and it's not really me saying that but that data is saying it.

I can't read any of those studies because they are not available online, but it's interesting that one of those articles is about "interindustry wage differentials," because that tends to CONFIRM my point that the track you get on early in life is primarily what effects income for the rest of life. If someone winds up in an industry with low wages, he will always earn less than someone who winds up in an industry with high wages, even though his IQ might be higher than the comparable person in the high wage industry.

However, in Charles Murray's paper, which you sent me the link to, he says that the primary means that IQ causes higher income is through educational credentials.

Someone else sent you that link, not me.

Other than that, you're kind of tilting at your own windmill. As I said in the first thread, I have no intention of leaving a detailed defense for why education has little influence beyond IQ. The papers I link here certainly don't make that argument, but they sure don't show anything like 0 with their methods either. Certainly, along with you there are actual scholars who have long argued the opposite (no IQ, only education) - what you argue now. Read Gintis and Bowles' Marxist 'Schooling in Capitalist America'. (you might send them a link to your finding)

The real issue here - why I even commented in this particular thread - is that you made an annoyingly false comment about the literature, when you have never read the literature.

I read a bunch of stuff about IQ in the workplace by John Hunter, and stuff by Linda Gottfredson, Arthur Jensen, and of course The Bell Curve by Chalres Murray and Richard Herrnstein (and I read Herrnstein's original essay IQ and the Meritocracy before the Bell Curve even came out).

Before I did this analysis I was under the impression, somehow, that IQ was more important than educational credentials, but apparently I was mistaken.

Can we define:

*middle class

*upper middle class

*upper class

I'm not sure we're all talking about the same things here. It's a bad idea for a middle class person to go into journalism or academia, but medicine or law aren't bad if you can pay your bills off.

SFG, my humble opinion is that class is like obscenity. I know it when I see it. Rule of thumb, I think of "upper middle class" as anyone:
-- from a family who owns a home
-- has college-educated professionals for parents (at least the dad)
-- and went to a high school from which a majority of graduates matriculate at four-year colleges without the word "State" in the title, absent the need for affirmative action.

I try to avoid "middle class" because most people seem to define it as anyone who isn't poor. I like "lower-middle-class" to describe people who are what we'd call working-class a generation ago -- except nowadays there aren't many factory jobs, so those people often go to CCs or universities whose name includes the word "State." They often become schoolteachers, social services workers, or otherwise join the "helping professions" (and if they're women, they marry men in the same or lower income bracket, no doctors). I call their colleges "working-class colleges," because the job opportunities for them are very different from even those of most "University of (state name)" graduates.

"Upper-class" means your parents can and will pay to send you through college without incurring debt themselves. They can and will give you the down payment on a home.

I don't know the literature, but I have some thoughts about why the correlation between IQ and income might be lower than we all expected. I have a small company involved in trading/speculating in futures markets, which might seem to be a field where income would be very highly correlated with IQ. I used to work for a famous (infamous?) hedge fund manager in NY who hired lots of smart people, mostly Harvard grads, libertarians, or both. He actually gave a small IQ test as part of the hiring process (at least when he first hired me in the 80s).
A lot of the people he hired eventually went to work on their own, and the results are in...the two best traders in the bunch have been one clearly smart but not obviously brilliant Harvard grad, and one former tennis pro who had "majored in tennis" at FL State. (Neither Jewish, by the way, despite several Jews in the pool.) The guy who seemed to me to have the highest IQ was never a good trader--always saw many sides to every question, but didn't approach markets systematically, and somehow seemed reluctant to pull the trigger. Our former boss himself, a brilliant but very eccentric guy, has over the years suffered one well-publicized blowout (losing all his customers' funds), and multiple wild swings. (My own performance has been roughly in the middle of the pack.)
Small sample, of course (about 12), but it seems to me that in our field, g is important but less important than caution, a sense of one's limits, etc., which the tennis player definitely had--in part because he knew he was less brilliant than many others. Hard work is valuable too, of course. (It may be that the benefits of g peak at a certain level, and that additional g doesn't contribute a great deal more.)
Probably the most important single characteristic is COMMON SENSE, which obviously isn't the same thing as g. (If one could quantify common sense, my wild guess is its correlation with g would be about 0.2. I myself wrote a piece about common sense in systematic trading which is somewhere online.) Sales ability (which I lack) can help with growing the business, but for traders, it's not the most important determinant of income, let alone of customer performance.

Do not forget market force also affect price of any thing including intellectual ability. When high IQ people are rare, high IQ people get highly paid. When tons of people with high IQ who can do rocket engineering, high IQ people will not get highly rewarded. However, a low IQ star or athlet might get way higher pay than smart ones. I am not deny g a valuable asset. But even an valuable assetts are subject to market force of supply and demand.

In China, smart people might not be so valuable compared to some really low IQ countries. That explained Chinese willing to emigrate to even poorer countries like Africa.

I didn't read all the comments but there is something wrong. The high scorers in math do only moderately in verbal but the high scorers in verbal do worse in math. This is well documented and has been statistically proved.

Perhaps each field has a different point at which additional IQ is no longer useful. For example, being a bank teller, after an IQ of maybe 100, additional aptitude may not help. For HS teachers this may be 120, for Doctors, 130, Consultants 140, etc. So we can think of IQ as more of a limiting factor. If many very smart people go into fields where there IQ is far above the 'limiting factor' this may explain the lack of correlation with aptitude and income. We also should consider that controlling for education introduces a host of other biases. If a person only achieves an HS education but has an IQ of 130, then it is likely that there are other problems with that person. Similarly, if a person attends an Ivy League College with an IQ of only 120 (which I would assume would be at the very bottom end) then that person is likely a very hard worker or a person with lots of other positive abilities not picked up by a g loaded test.

The Bell Curve explicitly states that there is no evidence for diminishing returns to higher Intelligence.

Of course its possible, indeed probable, that the studies didnt sample the entire range for all jobs. But when youre talking about mundane jobs like Bank Teller or HS Teacher, Im betting what you said it untrue - especially at the IQ thresholds you mentioned.

Though, its probable that a IQ 140 HS Teacher, even if hes screwed-up and/or a maverick, wont stay in that job for very long - one may have to factor that in to get a true view of his productivity, as training costs are real.

(Wow, we can post on really old posts :D )

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