Bryan Caplan  

Does It Matter If IQ Matters?

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A Parallel Fallacy... Faith-based Investing?...

Lots of people loathe IQ research. But even people who are open-minded about IQ often puckishly say "So what?" It doesn't really matter if the IQ is the main determinant of earnings, or economic growth, or anything else. All that matters is whether the marginal effect of policy on the variables we can change is worth its marginal cost. Thus, it doesn't really matter if IQ matters.

But this response overlooks a basic point. If IQ matters, then analyses that ignore IQ will typically overstate the marginal effect of other variables.

Simple example: If you statistically estimate the effect of schooling on earnings without controlling for IQ, you get a large coefficient. In the NLSY, for example, you'll find that one more year of school raises earnings by 12.6%. If you control for IQ, however, the coefficient on education plummets to 7.5%.

Does it matter that IQ matters? Of course! An investment in education that looks extremely profitable if you don't control for IQ could easily be a big waste of money. The reason: If you don't control for IQ, you are giving education a lot more credit than it deserves. To say "Let's focus on the things we can change" dodges the hard truth: After you adjust for what you can't change, the things that you can change may give you very little bang for your buck.

Thus, IQ is highly policy-relevant after all. The left-wing ideologues who damn anyone who even thinks the letters "IQ" are actually on to something: IQ research does turn out to be a rationale for "right-wing" laissez-faire policies. The more IQ matters, the more likely it becomes that existing government policies are a waste of money - and that you would get a bigger payoff by doing less - or maybe nothing at all.


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TRACKBACKS (6 to date)
TrackBack URL: http://econlog.econlib.org/mt/mt-tb.cgi/374
The author at Biopolitical in a related article titled IQ, schooling and policy writes:
    I can see no difference between IQ and schooling as matters of policy. [Tracked on October 2, 2005 4:28 AM]
The author at Stumbling and Mumbling in a related article titled IQ and redistribution writes:
    Bryan Caplan is one of my favourite bloggers. But I disagree with pretty much everything he says here:IQ research [showing a positive correlation between IQ and earnings] seriously undermines the moral case for redistribution. One of our most basic moral [Tracked on October 7, 2005 7:39 AM]
COMMENTS (70 to date)
spencer writes:

I'm sorry this does not make any sense to me.

What point are you trying to make?

Todd writes:

Spencer,
Your income is obviously below average.

jb writes:

Spencer,

Imagine you have three cars - brand A, B and C. You put them all out on the racetrack and race them, and discover that C is much faster than either A or B. You repeat this 1000 times, the results are stastically significant. Now you need to figure out why C is so much faster.

But you're not allowed to consider the engine as part of the reason.

What would happen? You'd probably decide that the gas or the tires were the reason why C was faster. And then you'd be confused when people bought those tires and used that gas, and didn't get the performane boost you said they'd get.
Because it's the engine that makes the car fast.

PJens writes:

Forbes reports (p302 of Oct 10, 2005 issue) that at least 273 members of this years Forbes 400 richest people in America have a college degree. I agree that IQ does matter.

Stormy writes:

As one with more education than most--and from all the best schools--, I can say a college or even graduate degree is not necessarily a sign of intelligence.

Now, let us look at the relationship between family wealth and success: A very high correlation indeed. Wealth does have a peculiar way of moving through generations. Must be good breeding stock here, huh?

If you think Bush could make it through hoisting his own bootstraps, you have another think coming.

Fazal Majid writes:

Another type of socialist reaction to the role of IQ would be something like Nobel prize winnder Jan Tinbergen's reported proposal for a tax on intelligence (I am not sure if he was entirely serious, of even if this isn't apocryphal, though).

That said, I would conjecture social skills (i.e. brown-nosing) plays a greater role than raw IQ.

For the non-econometrically minded (which are the ones with the question "why IQ matters"), here's as non-technical an explanation as I can come up with.

A lot of the variables that people say matters are associated (i.e. "correlated") with IQ. Let's follow up on Bryan's comment and use schooling as an example. Getting a college education is on average less "costly" in terms of time and effort for high-IQ folks than for low-IQ ones. They can teke harder classes with less study time needed, etc...

So, all things being equal, if you see that people with a college education earn more than those without, you're probably looking at both an "IQ" effect and an "education" effect on income.

If you didn't control for the fact that the college educated were more likely to be higher than lower IQ, you might attribute the higher earnings for college educated workers ENTIRELY to the effects of education. In fact, at least some of it is due to higher intelligence. So, not controlling for education makes it seem that education is more important than it really is.

Or, said in "econometric nerd-speak", you have an "ommitted variable" problem. If your explanatory variables are correlated with each other (i.e. if they move together), leaving out an important variable from your analysis will make the others seem more important (more "statictically significant").

jaimito writes:

Bryan is right that the do-nothing policy has its rational, but on the other hand, its adoption would signal that IQ is destiny. That would be unacceptable to the majority of the population. Therefore, a fake hope has to be maintained, and visible investment in the education of the morons is a social necessity.

Dewey Munson writes:

A quote from a wealthy man when asked for the secret of his success.

No secret. I just buy for $1 and sell for $10 and take my 10% profit.

Roger McKinney writes:

Unknown Prof! Good explanation! IQ and education should be highly correlated. If they weren't, the coefficient of education wouldn't change when you added IQ. What causes IQ? According to "The Bell Curve," it's about half genetic and have cultural. On the cultural end, having two parents who value education tends to be the driving factor. The children from these families will do well without government help. Children raised by poor single moms rarely do well. The only solution seems to be early childhood intervention, but even then, the values children catch from home tend to overwhelm those taught at preschool.

yifan writes:

A very old Chinese idiom says something like one can see some one's condition at old age when he is only three years old. Primarily this saying is supposed to teach children to get used to good habbits that are beneficial for a lifetime.

However, I do believe this idiom also reveals that early education (say before 5 or 8 years old) are highly important to a person's earning/iQ etc.

The ability to obtain a good early education again is correlated to parental income/ecuation level. Therefore it's quite likely people born in wealthy families with well educated parents are likely to form good (loosely speaking) habbits and attend good (or the "right sort") of nursaries and then go to good kindergartens, schools and colleges and so forth.

However, this does not mean we must necessarily reduce investment in higher education. People from poorer background still get admitted and they have a higher chance to offer their offsprings a better start in life. But on the whole, because more middle class children get into colleges, state funding is still primarily a subsidy to them.

Not sure what I said here is entirely relevant, sorry if I was being confusing!

Bill Dalasio writes:

A real quick question. It seems fairly unlikely that IQ exiswts as a purely random variable, as some of the comments here imply. If that's so, a straight multivariate regression seems like it might misrepresent IQ, as well. Specifically wouldn't you have to specify a system of simultaneous equations wherein IQ is the dependent variable? Sorry for getting a little geeky here, just a technical issue.

Bernard Yomtov writes:

Suppose we throw parents' income into the regression. Then I suspect we get a healthy coefficient, and the coefficients on both IQ and years of schooling drop somewhat.

If that turns out to be the case we could throw up our hands and say that earnings are determined at birth and there's nothing to be done, or we could try to understand the mechanisms and adopt policies based on that understanding. After all, knowing the ways in which parents' income affects childrens' might provide some clues as to policies that would have a beneficial effect on children from poorer backgrounds.

Steve Sailer writes:

Dear Bryan:

You've been doing some tremendous, courageous blogging lately.

Dog of Justice writes:

IQ research does turn out to be a rationale for "right-wing" laissez-faire policies.

Not always.

In a few decades, it is very likely we will have the technical ability to give all new babies genes for high intelligence (and lots of other miscellaneous genes as well, but it's intelligence that matters for the purpose of this discussion). However, not all parents will be able to afford the technology. There is a strong argument for implementing a left-wing policy of massive subsidies to ensure all parents have access.

eric writes:

The funny thing is, most economists, especially most labor economists, are "liberal" in the American sense. They believe all people are fundamentally the same, just with different endowments of wealth and opportunity. But...grad school at selective universities all have significant g-loaded hurdles, be they GRE scores, or first year exams that mainly assess analytical cleverness, often explicitly mathematical. So, sure, IQ doesn't matter to economists (as long as its above 130).

John S Bolton writes:

Some other possible examples: suppose that age of housing stock or of school buildings correlates highly enough with desired results, but we have a rule that says average IQ of the populations compared cannot be considered. A wild goose chase may follow; where we spend on buildings, expecting the correlations to work with any group. The same problem can occur for the rightwing; a high corelation between low crime rates and social advancement being observed, a policy of very strict removal of criminals might be pursued for some years, before anyone says you forgot to consider the effect of differential IQ's between groups. There could be rapidly diminishing returns as the crime differentials between groups is narrowed.

gcochran writes:

The heritability of IQ goes up with age, and is something 0.80 by midlife. And the non-genetic factors that matter are mostly within-family, not between-family.

Roger McKinney writes:

Parental income is highly correlated with the IQ of the parents, some of which the children inherit, so we're chasing our tales there.

McKinsey and Co. have found that the education that matters the most toward increasing a nation's wealth is OJT provided by companies. They claim that the benefits of government spending on formal education is vastly overstated. Other studies show that increased wealth leads to better education, not vice versa as the left claims.

When you consider that the opportunity costs of subsidizing education, i.e., the production we do without, the lack of results from spending on education makes it extremely expensive.

But then, everyone knows the Left cares about emotions, not facts. We must subsidize education whether it helps or not because it shows we care.

Jack Strocchi writes:
The more IQ matters, the more likely it becomes that existing government policies are a waste of money - and that you would get a bigger payoff by doing less - or maybe nothing at all.

So is Econlog suggesting that the state legalize crack cocaine? That would be laisse-faire with a vengenance. I wonder how some low-IQ members of the underclass might cope with that new freedom?

A problem with libertarians is that they assume the free market solves social problems best. But sometimes it only makes them worse, particularly for those who are not especially good at "rational calculation". This is one reason why authoritarian institutions, like Churches and Armies, can sometimes provide a better institutional framework for the less-gifted.

Of course some kinds of IQ-ignorant government intervention have been especially counter-productive to marginalised or struggling members of the community. Subsisiding illegitimacy and unconditional welfare did not help.

The claim that a laisse-faire policy is "best of all" also seems to be inconsistent with the Flynn-Dickens theory, that IQ-related differences in individual performance can be very sensitive to changes in social multipliers. Any kind of government action that encourages social integration would help the more wayward members of the community.

There are plenty of government carrots that would help a great deal. Improved nutrition and more practical tuition would certainly help underclass children make the most of their talents, whether innate or acquired.

Also, the government can wield its stick to worthwhile effect. More paternalistic policies targetted at the LHS of the Bell Curve - such as mutual obligation income support, zero tolerance of drugs, tougher border control and more correctional policies - are hardly examples of "doing nothing at all".

Sometimes the issue is not more or less kinds of intervention, but what kind of intervention is best. The problems associated with the underclass behaviour in the sixties through eighties were as much caused by unwise extensions in personal autonomy and the interventions of political authority.

Steve Sailer writes:

The most important book published in this decade for the economics profession has also been the most ignored: Richard Lynn and Tatu Vanhanen's "IQ and the Wealth of Nations." They report average national IQ scores from 168 studies across 81 countries and calculate a correlation coefficient of r = 0.73 between national average IQ and GDP per capita in purchasing power parity terms.

It's important to note that the correlation coefficient would likely be even higher if the IQ data was of more consistently high quality -- in other words, the noise in the IQ data makes the correlation with income lower, not higher.

My review of the book appears here: http://www.vdare.com/sailer/wealth_of_nations.htm

With Vanhanen's approval, I have posted all the data used in the book at http://www.isteve.com/IQ_Table.htm
(looks better in Internet Explorer than in Firefox).

The explanation for the table of data is at http://www.vdare.com/sailer/lynn_and_flynn.htm

Emma writes:

I found this blog via Steve Sailer's isteve.com blog and I think is the best blog he has ever referred to his readers.

Anyways, investment in education was brought up and had some questions, or things I wonder about, and want to know your thoughts.
As a brand new homeschooler who has been around many homeschooled children and read about them, I notice that the more child-paced the schooling environment, the more you see i.q. take on strength. In other words, in families that let the children go at their own pace, the academic performance of the child seems to increase exponentially with i.q. The dull or average child may graduate on time or a year or two early, the gifted child may be starting college barely a teenager.
(Not all homeschools are "Montessori" schools, but such merit based grade placement is ultra rare in other settings unless it seems the child is a genius.)
So, in a very wide open way, I wonder about educational investment, not just primary school for kids, and what we get back per i.q. point or standard deviation? (I also recall a recent post by Sailer, whenever I think of this, commenting we hadn't gotten back a lot for our decades long and huge investment in the underclass.)

Thanks for letting this woman think out loud and not hurry to a point.

Jack Strocchi writes:

I am not so persuaded about the validity of L & T's book, although I could be persuaded to be not so not-so persuaded. It is pretty clear that the sociological and ecological environment are powerful factors conditioning economic growth. The PRC had the same genetic endowment in 1998 as it did in 1968 yet it was incomparably richer owing to changes in social policy.

Thomas Volcken has critizied L & T on the grounds that they have made a simplistic interpretation from the data and that their conceptual understanding of intellectual capacity is flawed.

Lynn and Vanhanen have presented evidence that differences in national IQ account for the substantial variation in national per capita income and growth. This paper challenges these findings and claims that, firstly, they simply reflect inappropriate use and interpretations of statistical instruments. Secondly, it is argued that the models presented by Lynn and Vanhanen are under-complex and inadequately specified. More precisely the authors confuse IQ with human capital. The paper concludes that once control variables are introduced and the models are adequately specified, neither an impact of IQ on income nor on growth can be substantiated.

Obviously, the rate at which human capital can be mobilised and accumulated is pretty important in determing the rate of economic growth, whatever the innate capacity of a nation's citizens. In the case of Less Developed Countries, vigorous public goods policies, such as literacy and water purity programs, can raise national income. The example of Mahathir is instructive.

mstanley writes:

"The most important book published in this decade for the economics profession has also been the most ignored: Richard Lynn and Tatu Vanhanen's "IQ and the Wealth of Nations." "

Lynn & Vanhanen's book was embarassingly bad and was full of elementary statistical errors. Volcken blows them out of the water just by applying the most basic undergrad level growth theory. This was nice of him since no economics journal is likely to have enough interest in the book to publish his refutation. Lynn and Vanhanen's research wouldn't have passed review at any major econ journal for quality reasons; to say that such a poorly done book is the most important book of the decade in economics shows that you know little about social science research (and in Steve Sailer's case, are a monomaniac about IQ).

jaimito writes:

Roger McKinney expressed it nicer than I did. Spending money in educating the uneducable is a waste. An extreme example is the autistic child that was trained to turn around - it cost about 500,000 dollars to the taxpayer. On the other hand, vocational training on the German model is very successful. I am engineer and the State paid me to learn Autocad (computer design) - I am forever grateful. Of course I repaid it paying more taxes.

mstanley writes:

A couple of points about the original post:

1) The NLSY is not a great data set for looking at the effect of IQ since the AFQT was given to the subjects in their mid teens to early 20s. So even when controlling for years of education it picks up part of the unmeasured education quality effect. The controls for family background also aren't that great and results are can be quite sensitive to how you combine them and adjust for measurement error.

If you use AFQT and education alone as in the regression referenced in the initial posting the AFQT measure in the NLSY will be a mix of IQ, unmeasured education quality, and family background.

2) It is pretty common to try to adjust for ability scores in figuring out the return to education, this is not unusual in the literature. So implying that labor economists don't do it in education research is a canard.

3) Education always has big effects even after controlling for IQ, showing that purely social interventions have big impacts on life outcomes. The same seems to be true of parental SES, education, and family structure (although it is still hard to find data sets with really good measures of both parental wealth, IQ, and adult income).

4) Research that tries to show IQ has an "overwhelming" effect on life outcomes typically leaves out other controls that are highly correlated with IQ, especially education but also initial wealth and so forth. This is true of the Lynn & Vanhanen piece referred to above, and also of the Bell Curve, which IMO is not a very good book but still better than Lynn & Vanhanen. This happens often enough to make me suspect bad faith.

Basically the research seems to show that IQ has a statistically significant but not very large effect on life outcomes once other stuff is controlled for, which should not surprise anyone who has lived long enough to meet a lot of smart underachievers.

dearieme writes:

The left-wing ideologues who despise the very idea of IQ: are these the same chaps who claim every four years that their presidential candidate has a higher IQ than his opponent?

Svigor writes:

Basically the research seems to show that IQ has a statistically significant but not very large effect on life outcomes once other stuff is controlled for, which should not surprise anyone who has lived long enough to meet a lot of smart underachievers.

Mr. Sailer has the perfect analogy for your squid ink (paraphrasing): you can make the height difference between Japanese and Swedes disappear by "controlling" for the inseam of the pants hanging in their closets.

Squid...ink. "Controlling" for IQ proxies like parental investment and SES fools only those praying to be fooled.

Marc writes:

All the discussion skirts around the most important point. Blacks have a much lower IQ than whites. They will forever be stucked at the bottom, socio-economically. No amount of government intervention is going to change that objective reality. Likewise, any place where they are dominant (e.g. sub-Saharan Africa, New Orleans, parts of DC, etc.) should never be expected to be anything but hellholes.

Steve Sailer writes:

Jack:

You cite China's economic performance, but that is the best single country example of the usefulness of Lynn & Vanhanen's approach. In 1968, China had a Communist economy run by a charismatic megalomaniac. After 1978, it has been run by non-madmen. But lots of countries have been run by madmen at some point, but most have not recovered as fast as China.

China's big advantage: It had the world's largest gap between average national IQ (2 points higher than America's, according to L&V) and average wage (a tiny fraction of America's) So, the world has poured of hundreds of billions of dollars of physical investment into China, and the Chinese have responded with huge increases in productivity. In contrast, investments in countries with lower national average IQs, even ones with good leadership, have produced lower increases in productivity.

As for Volken, I believe I had an email discussion with him several years ago and pointed out the fallacy in his critique. He's the guy who claims that the difference in income is driven by % of high school graduates, right? Not surprisingly, IQ and high school graduation rates are correlated. I proposed several tests to him to help distinguish which was more the cause and which the effect, all of which pointed to IQ as the greater driver of the two. I don't recall him having an effective reply.

If you can't figure out the flaws in Volken's approach yourselves, I could dig up my email to him, but it would take me some time.

Nobody doubts that things like improved nutrition, healthcare, education, lessening of cousin marriage, etc. can improve IQ somewhat, but that doesn't mean the economics profession can afford to wish away the huge differences that currently exist in average national IQ, with northeast Asian countries at least two standard deviations above the bottom ranking countries in the world.

And, of course, you'll recognize the chicken or egg problem inherent in countries with very low IQs trying to bring about environmental change to boost IQs. For example, Thailand (only a half standard deviation below the US) has recently started a what appears to be a well-designed, sensible national program to boost average IQ by fortification of staple foods with iodine and other essential micronutrients in order to prevent IQ-lowering medical syndromes like the medical condition known as cretinism, which is caused by lack of iodine (the US instititued fortification of all salt with iodine back before WWII to eliminate cretinism). Over the decades, this should succeed in raising national average IQ in Thailand, as it probably did in the U.S. long ago. However, in deeply disorganized impoverished countries with average IQs much lower than Thailand's, it can be hard to get effective programs organized. (That's why I've long been advocating Unicef's Micronutrient Initiative, but the rest of the Western media has given it almost no attention, because they are terrified about repeating Unicef's statistics on the toll that low IQs take on 3rd World countries).

The existing national average IQs have been fairly stable for about a half century at least (with Northeast Asia apparently improving a little versus the rest of the world over that time, but other major regions not showing much relative change). You can see all the studies over the decades here: http://www.isteve.com/IQ_Table.htm (best viewed in MS IE rather than Firefox).

I don't know what changes we will see in the long run, but in the long run, it has been noted, we are all dead. Judging from history, L&V's data provides an important new roadmap to global development in the medium term, which the economics profession can hardly afford to ignore.

Dog of Justice writes:

They will forever be stucked at the bottom, socio-economically. No amount of government intervention is going to change that objective reality. Likewise, any place where they are dominant (e.g. sub-Saharan Africa, New Orleans, parts of DC, etc.) should never be expected to be anything but hellholes.

This is simply wrong.

We have ALREADY discovered multiple strong candidates for intelligence-enhancing genes. (I'll provide links to the science if you're interested.) It is only a matter of time before we discover many more, and develop the technical capability to splice them into new babies that don't have them.

The racial gap may have been intractable before, but it will not remain so for much longer. And I think we have a moral responsibility to close it as soon as we are capable.

Steve Sailer writes:

The hilarious thing is the only two times The Economist magazine has mentioned the book "IQ and the Wealth of Nations" in the 3.5 years it's been published is as the source of a table of average IQs by state (e.g., Connecticut 113, Utah 87) showing that blue states have radically higher IQs than red states -- and then a week later when The Economist admitted it had been hoaxed by a prankster who made up the claim that his bogus table was in Lynn & Vanhanen's book.

See http://www.iSteve.com/iqhoax.htm

Steve Sailer writes:

IQ does not have an "overwhelming" effect on life outcomes. Life is _extremely_ complex and a vast number of factors impact life outcomes. Among the hundreds of possible factors, however, IQ has a larger single causative effect than almost any other that can be easily measured (e.g., long term work ethnic and honesty are extremely important factors, but you can measure IQ fairly accurately in an hour, while lots of lazy or dishonest people can fake being hard working and honest for a short while).

When you get groups of people with differences of one or more standard deviations in average IQ between them, as you frequently find, you will witness statistical differences in life outcome that are highly sizable by the standards of social science.

Arrogantatheist2 writes:

Great post Steve. I think the most effort should be researching ways to increase IQ as much as possible. The nutrition, including I have read what the pregnant mother eats. Like a diet rich in fats that the growing brain needs.

I am usually against all government intervention but the US government laws mandating iodine in salt really was brilliant. I have to wonder how many people who weren't outright cretins, were helped increase their IQ growing up. As we can see from IQ and the wealth of nations, even a few points can make a tremendous difference.

And beyond just using it to help third world countries, especially ones with big potential like India.. Using it ourselves. Providing vitamins and some omega fatty acids at public schools for example could grab you a few points.

Am I the only person who remembers that the policy conclusions of "The Bell Curve" were anything but laissez-faire? As I recall, Herrnestein and Murray argue that the outcome of increasing-segregation-by-IQ is going to be very visible (as in color-coordinated) classes, with Asians at the top, whites in the middle and blacks at the bottom. This is likely to be politically intolerable, and so it might make sense to install some policies to fuzz up those distinctions, and provide padding.

My middle-aged memory is dim, but the policies H&M suggested surprised me, given the two guys' reps. They seemed downright social-democratic.

Arrogantatheist2 writes:

Michael what you say makes sense, the colour gaps would be politically intolerable.

But I was thinking about which nations in the western world are the most diverse racially. And I'd have to say the US is the most mixed at least compared with the European nations.

Yet it has been able to maintain substantially less government as a percentage of gdp. Its at 32% of gdp, while west Europe is around 50%.

I should add the problem with socialism isn't so much helping the poor. For example in Canada if our healthcare was only to help the bottom 10% of Canadians I wouldn't mind it. Same with welfare itself, its like 5% of total government expenditures.

jaimito writes:

We are discussing if education is a good investment by the State. Many studies attest that it is the best investment a country can do in order to generate development. The World Bank and the United Nations had eduation as their first priority for decades.

What Bryan is saying is that this premise is wrong. In the best of the cases, it might make only to fuzz up severe social distinctions, and provide padding.

BTW, current World Bank priority is fighting corruption. How can people be so stupid?

Jack Strocchi writes:

Steve Sailer Posted October 3, 2005 01:12 AM writes:

[Volken's] the guy who claims that the difference in income is driven by % of high school graduates, right? Not surprisingly, IQ and high school graduation rates are correlated. I proposed several tests to him to help distinguish which was more the cause and which the effect, all of which pointed to IQ as the greater driver of the two. ... And, of course, you'll recognize the chicken or egg problem inherent in countries with very low IQs trying to bring about environmental change to boost IQs.

Obviously a person, or nation, endowed with a high native IQ is going to be easier to get through high-school and college than otherwise. To that extent Volken's approach is fallacious.

However, even a fairly low IQ person, or nation, might be able to overcome the retarding effects of their modest endowments by getting everyone, the duffers included, to knuckle down and master some kind of skill, turn up for work, avoid the drug trade etc. This seems to be the approach taken by Mahatihir towards the MALAYs.

It seems to have worked out fairly well, with the ethnic Malays enjoying a fairly high standard of living despite the fact that they express a relatively low IQ, roughly ~85, going by the ethnicly familiarINDON's.

Of course the MALAYs have been the beneficiaries of INDIAN and CHINESE immigrants high IQ managerial and intellectual skills. Not to mentions fairly generous affirmative action programs organised by Mahathir.

Still the data shows that it is possible for a low IQ population to get to a middling standard of living by good political organization, hard study, good work habits etc. Whether it all goes pear-shaped the moment Mahatihir quits the scene remains to be seen.

I am persuaded by Steve Sailer that the recent achievements of the PRC show that, under conditions of normality, a high native IQ can work its inexorable economic magic. Come to think of it, the intellectual and industrial achievements of the Orient long predate those of the Occident, which would indicate that Chinese mental endowments have been helping them along the whole time.

I tend to think that there is a kind of assmetry in the relationship bw intellectual endowments and sociological environment (with major effects on industrial embodiments).

A population with a high value native IQ might be able to overcome the difficulties thrown at it by a bad social system (eg Jews in Medieveal Europe). But a bad social system might well "throw a spanner into the works" of a population with a low value native IQ (eg Arabs in modern Mesopotamia). With the right leaders and organization these peoples might nonetheless be capable of significant social progress towards a knowledge-based Open Society.

So we must not give up hope for progress on the part of low IQ nations. But neither can we afford to ignore that aspect of their performance.

spencer writes:

Take a look at the argument about blacks having a lower IQ at face value. What it is saying is the bell curve for blacks is slightly to the left of the bell curve for whites. But that means that some 90% of whites and 90% of whites overlap.

All you are saying is that a few blacks have a lower IQ then most whites and a few whites have a higher IQ then most blacks. But it does not change the point that there is no difference in the IQ of the bulk of the two populations. So to expect the massive difference in the economic wellbeing of two population to stem from this slight difference in IQ is a very poor argument.

I still stick with my original statement that what Bryan said makes no sense.

spencer writes:

Sorry, meant to say some 90% of whites and 90% of blacks overlap. Hardest thing in the world is to edit your own writing.

terry writes:

"Take a look at the argument about blacks having a lower IQ at face value. What it is saying is the bell curve for blacks is slightly to the left of the bell curve for whites. But that means that some 90% of whites and 90% of whites overlap.
"All you are saying is that a few blacks have a lower IQ then most whites and a few whites have a higher IQ then most blacks."
You need to read the facts in the works recommended, so that you state the argument as it is. What it says is that only 10% of all blacks even have an iq the reaches the "average" range, that is, over about 90. Only about 2% of blacks (compared with 15% or so whites/Asians) have an IQ over 120. Only 10% of whites have an IQ under 80. These are proximate percentages. Other posters here have more precise stats.
You are completely misunderstanding the overlap. The 10% means that 10% of blacks reach the white average. 90% are below it.
Those are more or less the facts. The argument is what iq means, not its racial distibution which doesn't change much from continent to continent

terry writes:

correction: distribution
The argument is what iq means, not its racial distribution which doesn't change much from continent to continent.

Bernard Yomtov writes:

Parental income is highly correlated with the IQ of the parents, some of which the children inherit, so we're chasing our tales there.

No we're not. The key is not the outcome of a regression but understanding the way parental characteristics affect childrens' earnings. Is it the wealth or the IQ that is more important?

Of course we all know that conservatives are driven by blind ideology rather than facts or logic.

Christine writes:

Anyone ever looked at research on the effects of changes in compulsory schooling laws on wages? If so, perhaps you noticed that they find a quite large effect, suggesting these policies at least had fairly high returns (not necessarily social, but the original post didn't seem to distinguish between private and social so I won't either). And the most obvious way there could be such a large effect is if the people who would have dropped out - in the interpretation of many commentators here, those of low IQ - had a really big increase in their wages precisely because they were forced to stay in school longer.

Go look have a look and tell me that it's all just about correlations between IQ and selection into different levels of education, and that government education policy is a waste of time. (A couple of names to google if you care to look at the research: Josh Angrist and Alan Krueger; Phil Oreopoulos)

Svigor writes:

Of course we all know that conservatives are driven by blind ideology rather than facts or logic.

On race there are no conservatives. Everyone in the public sphere of the west is liberal on race (with the exception of uncontrolled regions like the blogosphere).

Svigor writes:

Tell me, does anyone have any arguments to offer against forced wealth-transfer between groups (such as races)? Can anyone explain why, in a manner that doesn't require immoral practices and non-representative government, a successful group should be forced to carry an unsuccessful one?

Doesn't anyone find the reasoning behind forced integration and the abrogation of freedom of association totally undermined by the IQ gap?

Can anyone explain the advantages incurred by the successful groups in egalitarian democracy (i.e., wealth transfer and affirmitive action regimes) without resorting to the threat of aggression by unsuccessful ones?

Garett writes:

Steve Sailer writes:

"IQ does not have an 'overwhelming' effect on life outcomes. Life is _extremely_ complex and a vast number of factors impact life outcomes. Among the hundreds of possible factors, however, IQ has a larger single causative effect than almost any other that can be easily measured......"
===------------------

Garett says:

That's certainly true at the micro level: Within the U.S., IQ explains only about 10% of the variance in a worker's wages. Zax and Rees is a well-done example:

http://ideas.repec.org/a/tpr/restat/v84y2002i4p600-616.html

But at the cross-country level, national average IQ has a strong relationship with a nation's productivity--it explains about 64% of variance in productivity between countries. Figure 1 on Adobe Page 46 of my paper with psychologist Joel Schneider gives an idea of the overall relationship:

http://www.siue.edu/~garjone/JonesSchneApr.pdf

And reverse causation can't be the whole story: The East Asian miracle economies had high average IQ's--higher than most European countries--well before they became rich. (Adobe Page 42 of this paper I wrote: http://www.siue.edu/~garjone/naive.pdf)

This strong relationship between national productivity and national average IQ stands up to all kinds of robustness tests...Just look at all the variables we controlled for on Adobe Pages 41 and 45 of the Jones/Schneider paper--geography dummies, education measures, cultural and religious measures, you name it. It's not a coincidence.

IQ matters. I hope we can find ways to move it up in the world's poorest countries, but the only way that's likely happen is if people start learning the scientific facts about IQ.

For those interested in learning some of those facts from one of the greatest minds in psychology, I recommend Arthur Jensen's _The g Factor: The Science of Mental Ability_. That is the beginning of wisdom.

Garett writes:

How much do parents matter?

Bernard Yomtov writes:
"Parental income is highly correlated with the IQ of the parents, some of which the children inherit, so we're chasing our [tails] there."

======---------------
It's easy to find out if parental income matters all by itself, independent of genetics. Our society randomly assigns children to families all the time, (almost) independently of genetics: It's called adoption.

So, do adopted kids end up more like their adoptive parents or their biological parents? No contest:

http://www.marginalrevolution.com/marginalrevolution/2004/11/nature_nurture_.html

Biological parents, all the way. There are a large number of studies on this question of how adoption changes life chances, and they all point in the same direction: Birth parents generally matter more than adoptive parents.

That's the great thing about good social science: It can keep us from chasing our tails.

mstanley writes:

"Mr. Sailer has the perfect analogy for your squid ink (paraphrasing): you can make the height difference between Japanese and Swedes disappear by "controlling" for the inseam of the pants hanging in their closets.

Squid...ink. "Controlling" for IQ proxies like parental investment and SES fools only those praying to be fooled."

You're the one praying to be fooled here. Pants length is directly caused by height. Parental SES and investment is not directly caused by children's IQ. The difference could not be more clear. There is a correlation between parents and children's IQ, and then back to income, but it is small. As for "squid ink"...the arguments I was making were not complicated and were in plain English.

"Our society randomly assigns children to families all the time, (almost) independently of genetics: It's called adoption."

The issue with adoption is the relatively small range of environmental variation. For example, in the Sacerdote study of the Holt adoption program, parents were screened based on income, committment, marital stability, and so forth. How influential is environmental variance going to be within a set of basically U.S. middle class parents screened for positive personal characteristics?

Sailer's point that IQ is the most important easily measurable factor in success moves the goalposts a bit from saying that IQ is the most important factor in success. Yes, for employers administering a quick test he has a point. But I for one would rather be a white male with a genetic IQ endowment of 95, born to a wealthy suburban family in a good school district, than a black male with a 125 IQ genetic endowment born within a poor broken home in a ghetto. That may be the difference most relevant for social policy, and those differences are pretty darn observable.

Look, IQ is obviously an important causal factor, this is undeniable, and yes it is important to understand it. But the problem is the use of IQ to argue that environmental and social interventions do not matter. This is completely and demonstrably false; environmental, social, and cultural interventions have large and measurable effects for all outcomes. It is not hard to come up with a set of environmental and educational interventions that have equal effects on outcomes to a 1 SD IQ increase. In fact those interventions themselves would be correlated with IQ increases.

There seem to be a lot of people with a big emotional investment not just in the significance of IQ as one among many different causative factors but in IQ as *the* determining factor which both explains and justifies all the inequality we see around us. It's not hard to see the kind of personal hostilities that drive this belief.

There also seems to be the belief that talking about IQ is somehow a big "taboo" and is ignored by the social sciences, in particular economics. This is just not true, especially within the past decade. I suggest people who believe this check out some of the mountain of references in the Zax and Rees paper linked above, many by influential tenured profs at the top of their profession.

utro writes:

from mstanley

But I for one would rather be a white male with a genetic IQ endowment of 95, born to a wealthy suburban family in a good school district, than a black male with a 125 IQ genetic endowment born within a poor broken home in a ghetto. That may be the difference most relevant for social policy, and those differences are pretty darn observable.

But now we are back to Caplan's original point: How expensive is it to change those differences so they matter?

I am not so sure which of the two I'd rather be, but here's a more telling example. Children of black households earning more than $70,000 a year end up with lower average SAT scores than Asian-American kids from households earning less than $20,000. Since those numbers don't correct for other variables but it's unlikely that families earning over $70,000 a year don't have other nice advantages -- i.e. they're unlikely to be living in the poorest sections of South Chicago -- it puts limits on what realistic interventions can accomplish.

I don't see why a reasonable hypothesis that says the following isn't true -- aside from micro-nutrients and minimial medical care, it's unlikely that most of the standard interventions undertaken at great cost (including busing, remedial learning, smaller class size, better paid teachers, affirmative action, esteem-enhancing programs ) will do much to close the performance gap on standardized tests of groups (not races, mind you) with widely differing, measured iq. Perhaps, if we correct for everything, I wouldn't be suprised if it would cost as much as $25,000 per pupil or more per annum to make improvements of as little as 3 or 4 iq points over their lifetimes.

Assuming for the sake of argument that is true, what further room is there for intervention?

Do we have any strong evidence that this is not the case [by correcting the biases in studies that completely ignore iq]? That is surely another way of putting Bryan's challenge.

Steve Sailer writes:

There are some excellent comments in this thread.

I want to point newcomers to the topic to a five-part series I wrote in 2000 called "How to Help the Left Half of the Bell Curve:"

http://www.isteve.com/How_to_Help_the_Left_Half_of_the_Bell_Curve.htm

terry writes:

"But I for one would rather be a white male with a genetic IQ endowment of 95, born to a wealthy suburban family in a good school district, than a black male with a 125 IQ genetic endowment born within a poor broken home in a ghetto."
Point taken, however the stakes in this argument do not center on the individual, but on the group. The fact is, 125 iq is far more rare among blacks than among non-blacks, in any socio/economic/student group, even in universities; and if you believe the "racist" genetic argument, this is not going to change. Many believe that it is somebody's fault if the average black IQ is below the white average, or it is due to laziness or cultural attitudes. The genetic argument maintains it is no one's fault, it is just a biological fact. Do you really think this is easily discussed among polite people? Would you feel comfortable bringing in up in a school meeting? Or anywhere? Unless you are eager for a law suit, you'd better be careful.
Black FedEx employees are now suing because too few of them pass the test to be become higher level managers, this despite the commitment of FedEx to diversity. If anything, blacks and Hispanics, 40% of the employees, are over-represented. The lawyer taking the case has actually said, "They [FedEx] know few blacks and Hispanics pass they test, but they haven't changed the test."
Like I said--the stakes are high.
It's stuff like that that make you know IQ is still taboo.

PJens writes:

Caplan's point is valid. IQ is an identifiable factor/variable in success. I see another topic of discussion to be what contributes to above average (100) IQ. The economic cost to raise IQ is yet another.

Dog of Justice writes:

The genetic argument maintains it is no one's fault, it is just a biological fact.

It is no one's fault... until we are able to directly change genetics to significantly enhance IQ. At that point, things become a lot murkier. If, at that point, we allow social forces similar to that which has hampered Europe's adoption of genetically modified foods get in the way of providing everyone access to voluntary genetic engineering, despite knowing how to counter such social forces, we may deserve some blame for perpetuating inequality.

It's hard to accurately predict when we will reach that point, of course; I suspect it will be within the next 30 years, but I recognize Steven Pinker is a lot more knowledgeable than me and he's on the record as saying he'd be very surprised to see it within his lifetime (then again, that was before Gregory Cochran's and Bruce Lahn's papers identifying strong candidates for racially unequally distributed intelligence-enhancing genes were published). I believe it's important that we discuss what we should do when that day does arrive, however.

Mikael writes:

Garett and Steve Sailer seems very certain about the causality of GDP/capita and IQ. Garett also says that their model holds up well for several tests (what tests?).

I don't see any reason why one should be convinced here. First, there is not really any good test for endogeneity (spelling? sorry about that), and we must be led by theory here. I have seen some of the IQ tests used fairly often and I tend to believe that they should be very correlated with education. Force everyone to take a semeter of university mathematics and statistics, and I think average test scores would increase quite significantly. Thus, the scores reported on Steve Sailers website, how much are they driven by differences in education and like? And Garett, how can you actually test for reverse causation? There is no fool-proof way to do this.

utro writes:

The real problem is the threat of ostracism or lawsuit.

The fact that Larry Summers can be pilloried for making relatively modest comments (that may or may not prove to be correct) that are well within range of existing science is testimony to how sick the current state of debate is.

I suspect that with respect to testing, the problems of iq are made worse by single mothers, poor socialization, and an anti-intellectual culture in the underclass.

But until discussion becomes more open, all polite research must tiptoe around iq or mention it ONLY in contexts where it can be shown to be minor.

To take only one example: Can anyone doubt if Leavitt of Freakonomics had a study where ONLY iq explained differences in income or achievement, he would be pilloried for it even if no other result were viable? That this is an unlikely research outcome is unimportant. What is relevant is that researchers know that certain findings are more likely to be attacked no matter how carefully done and that this leads to self-censorship on a massive scale.

AA2 writes:

Someone mentioned they'd rather be a 95 IQ white being raised in a good suburban white home. Then a 125 IQ black raised in a ghetto. Its a good thought experiment.

I think they might be underestimating just how large a difference between 95 and 125 IQ there is. It takes about 115 IQ to be able to get a bachelors in engineering I believe. And at 125 IQ this black person is well above that, so likely will be in a position to move up the corporate ladder. As managing projects takes a lot of ability to understand many variables and how they are factoring in.

I don't think 125 IQ is enough to really go it alone and invent things, but we are looking at someone who is going to be comfortably upper middle class if they put the effort in.

Robert Speirs writes:

Isn't there a sort of "reverse free rider" effect here? Government interventions that improve general health or offer better or cheaper schooling (assuming govts ever really do that!) would seem to help high-IQ kids more than those with lower IQs. So perhaps Head Start, for example, if it did have a positive effect, would increase the "IQ gap", not decrease it. Same for nutrition and "cultural enrichment" programs. You can spend all the money you want on free libraries but you won't help kids who are too cognitively deprived to be able to read. Murray and Herrnstein's major point in The Bell Curve was that as society becomes more and more complex and technical, innate IQ differences will create more and more stratification even if you leave race out of the analysis. Uh oh. I'm starting to sound like Sailer!

Dog of Justice writes:

I think they might be underestimating just how large a difference between 95 and 125 IQ there is. It takes about 115 IQ to be able to get a bachelors in engineering I believe. And at 125 IQ this black person is well above that, so likely will be in a position to move up the corporate ladder. As managing projects takes a lot of ability to understand many variables and how they are factoring in.

Yes, I'd rather be the 125 IQ black, and it's no contest. Heck, I'd rather be a 105 IQ black than a 95 IQ white, all other things being roughly equal.

This is easier for me to say since I'm nonwhite myself, so I can see firsthand that racism probably counts for less than a 10 point IQ difference.

Randy writes:

Steve,

Read your article. Interesting and thought provoking. But I've got to ask one question.

You say you want to help the left half of the bell curve - to what end?

The increasing prosperity of the right half folks is not hurting those on the left, it is helping them. Their standard of living is getting better, not worse. Their numbers and lifespans are increasing. If something is wrong, it is that their pride is taking a hit from the expanding difference between their standard of living and that of those on the right.

So does making someone a beggar in addition to being a "leftie" improve that person's pride? And if for the sake of argument that you say it does, why mess with a system that works to improve everyone's standard of living, to bolster the pride of lefties, at risk of ending up with a system that no longer improves everyone's standard of living?

Your points are well made. But I think we are nonetheless, back at square one.

Steve Sailer writes:

One possible way to boost IQ of the poor is through improved infant nutrition. A number of studies have brought forward suggestive, but (unfortunately) probably not conclusive, evidence that breastfeeding for six months raises IQ by about 5 points. Poor mothers in America, especially blacks, are less likely to breastfeed.

This could suggest several avenues: The first would be to fund better research into infant nutrition. (This would seem like a natural for the Gates Foundation, knowing Bill Gates' documented obsession with hiring high IQ individuals, but that's probably exactly why he wouldn't get involved in any conceivably politically incorrect.)

The second is to promote nursing more, especially among the poor.

The third is to upgrade the baby formula given away in the WIN program to the latest and greatest Europeans versions with all the most mother's milk-like molecules.

Steve Miller writes:

Just to comment on a few themes here:

1) A few people here have suggested that education can increase IQ. It can, but only temporarily. This is an important prediction of the Dickens-Flynn model, and it is quite consistent with the evidence: heritability of IQ increases with age. The IQ improvements due to education decay into adulthood. Dickens-Flynn basically says there is no magic bullet for increasing IQ over its heritable component. cognitive skills, once increased, must be maintained. Taking a college math class may increase IQ temporarily, but it would have a minimal effect on average IQ over adult populations. More education and higher spending on education do not explain the Flynn effect. There's no clear rationale for "early intervention" as an effective instrument for increasing IQ.

2) Nutrition may be an exception to the above observation, but maybe not. Nutrition may also have to be maintained to prevent its IQ effects from decaying.

3) Controlling for a variety of Socio-Economic variables doesn't markedly reduce coefficients on either education or IQ measures when it comes to their effect on income, civic behavior, or scientific beleifs -- at least not in the General Social Survey. The effects of both education and IQ on a variety of variables is pretty darn robust.

Rob writes:

In addition to improved nutrition giving a small IQ boost, there's always creatine, which will significantly improve IQ.

There was also a study in England finding that giving prisoners vitamins, minerals, and essential fatty acids improved behavior.

Exercise makes me feel smarter. THere are some partial solutions.

On wealth/IQ

I do not buy it at all. I knew a guy who inheritted a small fortune. 100-150,000 after all the taxes. Did he buy an education? Did he start a small business? Invest? Buy a house? Nope he had tons of fun. Went to Hawaii, Europe. Reminded me of the joke about how a guy went broke "Some I spent on whiskey, women, and fast cars. The rest I spent foolishly." He was a guy for whom bartending was an ambitious goal. One needs little native intelligence and forebearance to keep inheritted wealth.

wkwillis writes:

Spencer and Terry
Black and white normals substantially overlap. Most smart people are white, not that most white people are smart.
Utro
An asian family with a high IQ kid and a low income is an English As A Second Language family, where the income is low because they do not speak English well enough to get a good job. Their income in the old country in Asia was almost certainly upper middle class, $70,000 or equivalent.
My grandfather was only a chauffer but his father back in Austria-Hungary was the owner of a cobbler shop and the mayor of his village. He took a whopping social status reduction to come to America for his children's sake, and it was the right decision. Mom went to Radcliffe, where she met Dad when he was at Harvard.

Jack Strocchi writes:

Can anyone answer a simple question - which is a better predictor of lifetime income: IQ or SES?

And is the best predictor, whatever it is, valid for all races and classes?

The problem is that both IQ and SES are significantly heritable, but in different ways. IQ is probably part-heritable, through a child inheriting the parents geneological endowment. SES is obviously part-heritable, through the parent imprinting on the child a special sociological environment.

The two kinds of heritability are obviously interactive and very complicated to disentangle. Does anyone have data or models that clarify this?

(I am using heritability here in the colloquial sense of parental-filial transmission.)

Rick writes:

mstanley says:

"But I for one would rather be a white male with a genetic IQ endowment of 95, born to a wealthy suburban family in a good school district, than a black male with a 125 IQ genetic endowment born within a poor broken home in a ghetto."

You're kidding - I'd take the higher IQ in a heartbeat. Then I could go to college AND get laid.

mstanley writes:

Some people seem to be misunderstanding somewhat my thought experiment on the choice between being a black kid born to a single mother in a terrible neighborhood with a *genetic endowment* corresponding to a 125 IQ, vs. a white kid born to a rich family with a *genetic endowment* corresponding to a 95 IQ. I highly doubt that by the end of high school those two kids would still have a 30 point IQ difference. In fact it is perfectly possible that depending on the quality of their early environment they would have an equal IQ at the age of 18. You can debate back and forth about the exact level of genetic heritability of IQ (I think 80% is far too high; most studies here do not think about the environment/genetics interaction). But my reading of the evidence is that there is a very substantial environmental component that is especially important early in life. (This makes excellent evolutionary sense too, as the usefulness of abstract thinking skills associated with IQ differs depending on the environment).

There is an argument that one would rather be a black kid from a poor family graduating from HS with no criminal record and a 125 IQ measured at graduation than a white HS graduate from a rich family with a 95 IQ measured at graduation. Particularly if their schooling motivation and knowledge about the accessibility of college were similar (which it might not be, the white kids parents would basically set him up in college). But that is a different thought experiment than the one I proposed.

In other words, SES is (in my opinion) more important than genetic IQ not only because of the direct effects of wealth and connections and outcomes, but because of the environments and training that high SES kids are brought up with. These have an effect on IQ, an effect on discount rates (ability to defer gratification, which is critical -- it is a differentiable quality from IQ although correlated with it), and also an effect on general know-how of how to get along in life.

The Dickens/Flynn argument about people sorting to IQ enhancing environments and IQ going to genetic potential as life moves on is a good one, but it depends critically on the structure of the environment, in the sense of the openness of entry to IQ enhancing environments. Early intervention doesn't just boost your IQ temporarily, it can allow entry to IQ enhancing environments over the rest of the life course.

On his third point -- of course IQ effects are robust to education controls (though they drop in magnitude). But the crucial point is that *the reverse is usually true also*. In other words, many social interventions have results that are robust across high and low IQ populations.

People are right that the critical point is cost of social interventions here. I have a different perspective on the costs, and I would also point to what i think are pretty substantial effects of interventions we have done so far on black IQ (the black white IQ gap has probably narrowed since the 60s, and I think it would have significantly increased without any interventions). I am also quite interested in what the IQ effect of e.g. the HUD Moving to Opportunity shifts in neighborhood background have -- those were fairly low cost interventions that produced huge schooling effects. But this argument is too long and complex to have here.

Finally, agree 100% with Mikael about the endogeniety problem with cross-country IQ/productivity relationship. Don't have time to deal with this whole separate issue here. Don't think much of Lynn and Vantinen, Garret's paper appears interesting and good. But the one I saw (one of the links didn't work), didn't appear to have an accounting framework where the contributions of various national differences to productivity would actually sum to 100%, so it would be quite easy to overestimate the actual effect of IQ relative to other things. Not sure though.

Jess writes:

so what enviromental changes have suggested a IQ incease.

and other reasons why IQ seems to be increaseing by each generation.

jess writes:

Would Just like to thank you very much, for your opinions

Jes writes:

why is IQ increasing by each generation?

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