Do Smarter People Make More Income?

[james.hendrickson]

Guys,

Here is a neat little study I thought you all might fight interesting. Basically, the Ph.D. researcher Lisa Wade is saying that smarter people have higher incomes, but not higher levels of overall wealth.

Thoughts?

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Correlations Of IQ With Income And Wealth
Lisa Wade, PhD on February 6, 2008

First, defining our terms:

Income is the money in your paycheck. It’s what you make from your job. Wealth, in contrast, is everything else. It includes stocks and bonds, home equity, other properties, investments, your retirement funds etc. Importantly, you can inherit wealth directly, but you cannot inherit income directly (most of the time).

The relationship between IQ and income is somewhat correlated; in general, people with higher IQs make more money:



But the relationship between IQ and wealth is all over the map:



This suggests that there is some meritocracy in the distribution of income, not so much in who owns yachts and has deep investment portfolios.

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From Zagorsky, Jay. 2007. Do you have to be smart to be rich? The impact of IQ on wealth, income and financial distress. Intelligence 35: 489-501.

[Nutria]

This is perfectly reasonable.

After all, it takes much higher than average intelligence to get through med school, be a competent computer programmer, etc. Heck, it probably takes higher than average intelligence to be a good electrician.

[TexasHusker]

I think if you have an average IQ you have plenty of smarts to make a lot of money. Average IQ folks get through medical and law schools every day.

You generally don't get rich working for someone else, though you may earn a very good living. The guy that owns the co. you work for is the one getting rich, and he may or may not be smarter than you.

If you are signing your name on the FRONT of the payroll check, you've taken a lot of risk to get into that position, and are hopefully reaping substantial rewards for doing so. That doesn't mean your IQ is anything special.

[Jluke]

personality can usually help someone earn more than a "smart person"



.

[greenskeeper]

work ethic

plain old luck of the draw

[Nutria]

work ethic

plain old luck of the draw

Work ethic is in no way shape or form "luck". To think so is ... silly.

[Nutria]

I think if you have an average IQ you have plenty of smarts to make a lot of money. Average IQ folks get through medical and law schools every day.

You generally don't get rich working for someone else, though you may earn a very good living. The guy that owns the co. you work for is the one getting rich, and he may or may not be smarter than you.

That's why there are two plots: income and wealth.

If you are signing your name on the FRONT of the payroll check, you've taken a lot of risk to get into that position, and are hopefully reaping substantial rewards for doing so. That doesn't mean your IQ is anything special.

Forrest Gump is fiction. The correlation between income and IQ is reality.

[james.hendrickson]

Work ethic is in no way shape or form "luck". To think so is ... silly.

Well...you could say we are lucky to be born in a country that has good laws and solid infrastructure. : )

[TexasHusker]

That's why there are two plots: income and wealth.



Forrest Gump is fiction. The correlation between income and IQ is reality.

I know successful doctors who are morons. I know a pole climber for the local electric company who is probably the smartest guy I've personally known.

[disneysteve]

I know successful doctors who are morons. I know a pole climber for the local electric company who is probably the smartest guy I've personally known.

The study was about IQ. That's different than "street smarts" or "common sense" or any observatory measure of intelligence. The doctor who you consider a moron might have a very high IQ.

[TexasHusker]

The study was about IQ. That's different than "street smarts" or "common sense" or any observatory measure of intelligence. The doctor who you consider a moron might have a very high IQ.

Or not😎

[Nutria]

Well...you could say we are lucky to be born in a country that has good laws and solid infrastructure. : )

But that's completely independent of whether someone is intelligent or conscientious.

[Nutria]

I know successful doctors who are morons.

Define -- in this situation -- moron.

[Nutria]

The study was about IQ. That's different than "street smarts" or "common sense" or any observatory measure of intelligence. The doctor who you consider a moron might have a very high IQ.

1. I'd like to meet someone who's "street smart" and stupid.
2. Common sense isn't common.

[TexasHusker]

Define -- in this situation -- moron.

Below average intelligence and has no business cutting on people while they are asleep?