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Yesterday the Lion of the Blogosphere discussed IQ and income, but once again he framed it in terms of low IQ predicting poverty, rather than simply stating that IQ and money are correlated.  That’s because the Lion believes that the IQ income correlation is stronger in the lower half of the IQ distribution.  But is he right?  Perhaps at the extremes.  For example, severe mental disability precludes one from having a high income, but severe giftedness does not preclude one from having a low income.

Such outliers aside, the correlation between IQ and income seems to be about the same for both halves of the bell curve.  For example Charles Murray (see TABLE 2-1), reports the median earned income of young adults by IQ (1993 dollars):

Very Bright (About IQ 125):  $36,000

Bright (About IQ 115): $27,000

Normal (About IQ 100): $21,000

Dull (About IQ 85): $13,000

Very Dull (About IQ 75): $7,500

 

The Very Brights are $15,000 better paid than normal, while the very dulls are $13,500 worse paid than normal.  In other words, high IQ is more of an asset than low IQ is a liability.  Also notice that the income difference between the Brights and the Very Brights is $9000 while the income difference between the Dulls and Very Dulls is only $5,500. In other words, IQ is making a bigger difference at the higher end than the lower end.  Both findings are hard to square with the Lion’s world view.

You can also look at it the opposite way (average intelligence for a given income).  For example, college bound kids from the bottom 10% of household incomes (about $17,500 in 2008) averaged around 1323 out of 2400 on the SAT.  College bound kids from the median income households (about $51,000) averaged about 1461 on the SAT, and college bound kids from the top 10% of family incomes (about $160,000 in 2008) averaged about 1628 on the SAT.  So the cognitive gap between rich kids and middle class kids (167 points) is greater than the cognitive gap between middle class kids and poor kids (138 points).  If the intelligence income correlation were stronger at the lower end, the opposite would occur.

So the preponderance of evidence suggests that the IQ income correlation is about as strong or stronger for the top half of the IQ distribution as it is for the bottom half.  It’s just that dumb rich people are more noticeable than smart poor people..

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