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Few traits affect our self-esteem as profoundly as IQ and income, so suggesting that the two are correlated makes a lot of people unhappy.  While many people will concede that such a correlation exists,  they will insist on making certain caveats, such as that IQ is only important below IQ 120 (see Malcolm Gladwell) or that IQ is only important because it reflects the social class you were raised in.  Even the Lion of the Blogosphere, got in on the act, writing:

While noting that IQ is as unimportant as it is, it is probably even less important for people who go to college, because low IQ is a better predictor of poverty than high IQ is a predictor of financial success. In fact, there is other evidence out there to suggest that, after educational credentials are accounted for and for those who have at least a college degree, higher IQ is actually correlated with lower income. (The corollary is that IQ is a useful predictor of income for people who do not have a college degree, because people without college degrees but with higher IQ are more likely to wind up in skilled blue-collar careers. For example, there are many civil service jobs that pay decent middle-class salaries which use g-loaded tests for hiring purposes.)

But is this true?  In a fascinating 1996 analysis (see Figure 2) people with a four year college education were divided into five categories based on cognitive ability, with level 5 being the brightest and and level 1 being the dullest, and their weekly wages reported.  The result was that college grads with level 5 intellect typically made $631 a week, level 4 made $561 a week, level 3 made $503 a week, level 2 made $466 a week and level 1 made $357 a week.  So even among people who all have a college degree, there’s a very clear positive meaningful correlation between IQ and income.

A similar pattern was found among those with just a high school education, except here incomes were depressed for all intellect levels, showing that education affects income independently of IQ.  With only a high school diploma, level 5 intellects now typically made only $447 a week, level 4 made $340 a week, level 3 made $320 a week, level 2 made $294 a week, and level 1 made $265 a week.

So while high IQ helps makes you richer, regardless of whether you have a college degree or not, the Lion is also correct to emphasize the importance of college. College grads make more money than high school grads, even when they’re three levels dumber.

 

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