High IQ doesn’t lead to higher income, part IV

CORRECTION

Dan Morgan, from the blog No Speed Bumps, has pointed out a major discrepency in the Lupinski article. There is indeed a chart showing a much higher percentage of participants having $100K+ income. (Dan Morgan says 37%.)

Perhaps, the authors meant to say that 7.9% of participants earned at least $250,000. It might be possible that 60% of graduates of top ten MBA programs would be making at least $250,000 by the time they are 33. Those investment banks pay a lot of money. You just need the magic of a degree from the right school in order to open the piggy bank.

If the 37% figure is correct, this in no way invalidates the tracks theory of labor market outcomes. The majority of paticipants had graudate degrees of some kind, including highly valuable graduate degrees like MDs and top ten MBAs. If a similar percentage of the law school graduates also attended top law schools, they would also mostly be making more than $100,000.

It's pretty pathetic that a published research paper, signed by so many authors, would have such a glaring error in it. What's the point of reading these published papers if the quality is no better than what you read in blogs?

ORIGINAL POST WHICH IS BASED ON WHAT IS POSSIBLY A TYPO

A research article, Tracking Exceptional Human Capital Over Two Decades by Lubinski, Benbow, Webb & Bleske-Rechek (link to PDF file) was brought to my attention. It was purported to show the fabulous success of those with high IQs, but a closer examination shows just the opposite, and confirms the findings from my previous post on this topic.

This research article tracked people (286 males, 94 females) who “scored in the top 0.01% on cognitive-ability measures” before age 13. This was determined by an early administration of the SAT. These high IQ people were looked at when their average age was 33.6.

Now of course intelligence is primarily a genetic trait, so people identified in their pre-teen years as being super smart are going to stay super smart for the rest of their lives. So the group had great academic success, attended the best colleges, and “doctoral-level degrees (Ph.D., M.D., or J.D.) were earned by 51.7% and 54.3% of male and female TS participants.”

But my interest has been to see if people with high IQs earn more money, and it seems that based on this research paper they don’t.

Interestingly, the paper talks about participants who earned at least $100,000/year without directly telling us how small a percent earned that much money. Well, a little 8th grade algebra was able to ferret out this information. The paper informs us that 20 survey participants had MBAs, that 46.2% of the participants who earned more than $100,000 had MBAs, and that 60% of participants with MBAs reported more than $100,000 of income. Doing the algebra, we discover that only 30 participants had $100,000+ salaries, only 7.9% of the sample.

How does this compare to General Social Survey respondents? I looked at GSS respondents aged 30-37 because this is within four years of the average age of 33.6.

For male GSS respondents who had at least a college degree (N=221), 11.3% reported income of at least $100,000. (For the GSS income group of $90,000 to $109,999, I assumed that half had at least $100.000.) For female respondents with at least a college degree (N=235), that percentage was only 2.3%. Now if we apply these percentages to the male/female breakdown of the participants in the Lubinski paper, we would expect that 9.07% would have incomes of at least $100,000. This is greater than the actual finding of 7.9%.

So we see, the financial success of a group of super-elite high IQ individuals actually lags a group of just average Joes with college degrees.

Why did these super-high IQ individuals have such mediocre career success compared to average college graduates? It all goes back to my tracks theory of labor market outcomes. The people with super-high IQs who used their IQs to obtain valuable degrees (such as MBAs from top schools) which allowed entry to the best career tracks did very well financially, but the vast majority of the sample pursued academic programs that led to lower paying careers.

If one believes that a person’s salary is a measure of that person’s contribution to the economy, then the conclusion is that super-high IQ people are not contributing more to the economy than average college graduates.

Comments

[Turkey]

Well, it's also possible that these super smart are accumulations of positive intelligence traits connected with negative physical, social or emotional traits - ex. the well known myopia/intelligence connection. Think of it like Greg Cochran's concept of overclocked Ashkenazi Jewish brains, except on an individual level. That's not excluding non-genetic causes, either - think of the Toxoplasmosis gondii story that was recently in the blogs.

So, in that model, the "bleeding edge" intellects are probably sticking together lots of various intelligence-generating conditions but the end result is something like a car with too much engine that can break its own axles off the line. On the other hand, 120 IQ MBA backslappers have enough horsepower to cheat 100s, but they aren't past the inflection point.

[nobody]

This post repeats the obvious and bring nothing to the discussion. As already mentioned several times, super high IQ is of marginal value on most jobs. A better analogy is that super smart people in most ordinary job is like a Corvette being used a commuter car in NYC traffic. It has no advantage over the 4 door family sedan on the next lane.

Commentators also pointed out that HS's track theory is misleading. What he is talking about is field that have artificial high barrier for entry. Effectively, cartels.

Other also pointed out that these "super smart" people might not be all that interested in chasing after money. Once their basic needs are meet, they choose to not spend all their intellect in the pursue of cash. There is nothing wrong with that and this type of study doesn't deal with that possibility.

A better question is, what should these "super smart" people be doing to better this world?

[SFG]

nobody: Notice how many of the female brainiacs became teachers, and I'm sure they had other options. Evidently they did decide to better the world, by sharing knowledge (something they probably valued, being very bright) with the next generation. There's not much point discussing how much money people who aren't interested in making money make; it's kind of like talking about the artistic abilities of investment bankers. They don't care, so the numbers aren't very high.

I like HS's detective work. Nothing more fun than stealing the truth out of people trying to hide it from you.

Hold on though, HS.
"If one believes that a person’s salary is a measure of that person’s contribution to the economy, then the conclusion is that super-high IQ people are not contributing more to the economy than average college graduates."
You've stated yourself that high salaries are the result of a cartel, and proven it quite nicely. Besides, I think teachers and scientists contribute quite a bit more than their pay reflects. Look at Kary Mullis, who got paid $10,000 for inventing PCR.

[Peter]

Sales is one field in which top performers can earn very serious money. Not retail sales, of course, but high-end types of sales such as investments, commercial real estate, expensive technology products, and so on. The point is (I may have mentioned this before), people at the very top of the I.Q. scale probably aren't likely to go into sales.

[Spungen]

"female brainiacs became teachers, and I'm sure they had other options. Evidently they did decide to better the world, by sharing knowledge..."

SFG, you know better than that. ;) Why would women be any more likely to *voluntarily* choose service over money?

[JewishAtheist]

If one believes that a person’s salary is a measure of that person’s contribution to the economy...

No offense, but you'd have to be an idiot to believe that. If someone's not contributing directly to a particular investor or group of investors, that person is not going to be paid very well relative to his or her abilities. After all, who pays salaries?

Government ideally should pay salaries to those who benefit the greater good, but government being run by actual people of course prevents this from happening. That the system convinces high-IQ people to take lesser-paying jobs that serve the greater good (teachers, professors, scientists, etc.) is frankly amazing.

I think part of what you keep missing over and over again is that those with ultra-high IQs aren't interested first and foremost in their salaries.

Come to think of it, that's the problem with most economists.

[SFG]

"SFG, you know better than that. ;) Why would women be any more likely to *voluntarily* choose service over money?"

Gender roles? I suppose. I was assuming most of these people, male and female, were coming from upper-middle or middle-class homes where gender roles are somewhat weaker.

Interestingly, I was offered to be in that study and turned it down because I didn't like people asking me questions about how much time I spend listening to music and hanging out with friends--the whole thing felt too Big Brotherish to me. Keep in mind I was 12 at the time. I didn't achieve anything like the success of the participants, so I wonder if there's some kind of response bias here? Maybe there's an even larger pool of people who didn't join the study and weren't as successful for some reason--I talked to a friend of mine who did, and said they helped him with college or something. I forget the details and wish I could bring them back now, but I've since lost touch.

[Biff]

It has been said that the ideal level of intelligence for a football player is that he should be smart enough to remember the plays, but dumb enough to believe that winning at football is the most important thing in the world.

An analogous point about income has been made already on this thread and other previous threads on this topic: The ideal level of intelligence for achieving a high income is smart enough to acquire the credentials and out-compete most others in the field, but dumb enough to think that money is the only thing that really matters.

Abraham Maslow's Hierarchy of Needs illustrates the concept that that other nonmaterial needs may be more important at the highest levels of achievement.

[roseindigo]

I surely liked that analogy given above: "A better analogy is that super smart people in most ordinary job is like a Corvette being used a commuter car in NYC traffic."

In my own experience I've also found that super-smart people don't care as much about money as they do about intellectual challenge, and some super-high-IQ people I know are not very practical either, and tend to live in the clouds instead of being out there making money.

I agree with them: Making money isn't the most important part of living. On our deathbeds I don't think many of us will think about how much money we made, and instead will be thinking about how much time we wasted not doing the things we really wanted to do.

Maybe super-smart people already know that.

[Dan Morgan]

Half Sigma,

Regarding the people being studied (the TS group) who made more than $100k per year, I think you misread the study. Below Figure 2 it says:

“Percentage of graduate-student (GS) and talent-search (TS) participants with tenure-track or tenured positions (left) and
annual incomes of $100,000 or more (right).”

So it appears to be that 37% of males in the TS group make over $100k and 22% of the females of the TS group make over $100k.

Regarding the GSS survey you indicated: For male GSS respondents who had at least a college degree , 11.3% reported income of at least $100,000. For female GSS respondents who had at least a college degree, 2.3% reported income of at least $100,000.

37% vs. 11.3% is quite large for males. And 22% vs. 2.3% is quite large for females. So this would seem to say that the high IQ group did much better than the average college graduates.

[Jody]

Is this then an example of WordSUM being a poor proxy for analytic IQ? At the same time this should be somewhat supportive of your track theory (i.e., you may be a verbal genius but English majors don't make much money)

[Mr. Mercy Vetsel]

The whole premise of this post as stated in the title is entirely wrong. I did my own review of both HS's GSS data as well as the NLSY sample and found that IQ is strongly correlated with income and that even after controlling for degree there remains a correlation with IQ.

While it was suprising to me to see that degree level is more important than IQ in predicting earnings, to say that IQ is not important is just plain wrong. Many high paying jobs require high IQ's and the fact that education is the channel that high IQ people use to obtain high incomes doesn't change this relationship.

Controlling for an intermediary result, in this case education is a like announcing that height is not correlated with membership in the NBA if you control for the height of college players. Sure being tall may be a requirement to get you into college basketball, but after that it doesn't help you. Well, I think everyone can see the fault with this reasoning.

On a separate point, the idea that labor prices are based on a cartel is true when you look at legally enforced monopolies like the ABA and the AMA, but it's dead wrong for just about everything else. The reason modern economists on the left or right don't buy Marx's theory of the excess value of labor is because it's simply wrong. Bargaining power dynamics can play a role in labor pricing, but it's not the primary explanation for the difference in pay. Structurely, investment bankers, software consultants and day laborers function in very similar markets. The primary reason for the difference in their incomes is the value they provide to their employers.

-Steve

[SFG]

What would invalidate the tracks theory? A scientific statement is supposed to be falsifiable. Tell us how to prove you're wrong. ;)

[Half Sigma]

I believe that various careers have an IQ floor. Those with IQs underneath the floor would have a difficult time being able to to the job properly.

Being a medical doctor probably has a higher floor than being a truck driver. I'm sure you can all thing of other examples.

However, for the highest paid professions, there are many more people meeting the minimum IQ requirement than there are spaces available in the profession. This is most especially true for investment bankers and BIGLAW attorneys.

[SFG]

Ya, but it's not just IQ. Bankers and lawyers have to win clients, so they look for personality as well when interviewing. (Interestingly enough, as I recall for law school the interview is optional. Anyone know why?) The only ones who look for IQ to the exclusion of personality are software firms like Microsoft and Google, and they have very specific reasons for doing so.

[Jack]

I agree that the very intelligent might be less interested in working 70-hour weeks for a higher salary, and more interested in a general quality of life. Then again, money is important in all areas of life. We should be talking about how high-IQ people can make more money than they do now. Maybe some stock tips or something. I mean, there's gotta be a way to get one over on the "120-IQ MBA backslappers".

[A]

Unfortunately, high IQ people will become rarity in future according to movie " Idiocracy". You all should watch this one.

Solution, WAR, war, war, famine. Human are best at killing their own. In war and famine, low IQ would be eliminated in higher percentage than high IQ types. But the war has to be old style one conducted by privilaged people like king or khan. They even same enemies of high IQ.

Hitler's war (left wing socialist) would not be good because he kill any one who is better than average German like Jews or upper class Poles.

We should welcome back King or Khan as our rulers. So talented or high IQ people will be selected for.

[SFG]

You can't see Idiocracy in NYC or anywhere indeed on the East Coast, which just shows they want to kill it. You don't leave your movie out of a crucial market like that unless you're trying to avoid it getting noticed. Sailer's written a bit about this; much as I want to see the movie I am not flying to Chicago.

"I mean, there's gotta be a way to get one over on the "120-IQ MBA backslappers".
Not really. I imagine lawyers with IQs as high as 130 might do well; there's no interview for law school, after all, and acing the LSAT can get you into a very good school from what I hear. Med school is another option if you can pass the interview.

[SFG]

Yes you could try to work for Microsoft but there are very, very few software jobs that really reward high IQ; it's like trying to be a movie star.

[Jack]

SFG: IQ of 130 for law school? I would bet people in top law schools have IQ's in the 140 area at least. 130 isn't that great, like 97 percentile. And not all bright people do badly at interviews. I actually do very well, my problems are my ADD and laziness.