Although IQ and income are positively correlated at a value of about 0.4, commenter Mugabe feels this is mostly just an artifact of education, writing:

as LotB has mentioned: high IQ leads to high educational attainment and to connections and this really is more than sufficient to explain all of the correlation.

that is:

smart people get good grades and get into good schools and are socialized and etc.

the effect of IQ ceteris paribus is positive but not by much.

I agree that if you controlled for education, the correlation between IQ and income would be greatly diminished, probably going from 0.4 to less than 0.2. The Lion of the Blogosphere sometimes goes even further, suggesting that if you control for certain forms of education, the correlation between IQ and income might even be negative.

Way back in the 1990s, even the book The Bell Curve (which really popularized the link between IQ and money) admitted that among graduates of Harvard, there might even be a negative correlation between IQ and income if the brightest students go into research where they earned a modest living, while the dullest went into business where they might get rich.

But what if anything does this tell us about the independent effect of IQ on income? Does it prove that smart people get rich primarily because they have the right credentials, and not because they are better at adapting to the real world?

The problem with controlling for education is you’re not comparing different IQ levels with all else being equal, because when an IQ 110 and an IQ 150 both have an AB in English from Princeton, the lower IQ person probably has non-cognitive advantages (i.e. strong work ethic, rich well connected family, affirmative action, etc) that allowed him to achieve the same degree as someone 35 IQ points smarter, and those same advantages will help him make a high income when he leaves Princeton.

Similarly, when an IQ 67 and an IQ 107, both have only a 10th grade education, the IQ 107 must have non-cognitive liabilities (i.e. extreme laziness, low socioeconomic background, mental illness etc) that explain why he has the same education as a mentally retarded person despite having above average IQ.

Given this, we might expect lower IQ people to do relatively well economically when you control for education and higher IQ people to do relatively poorly, because controlling for education causes the lower IQ person to be advantaged in many non-cognitive domains.

Thus the ideal way to compare the independent effects of IQ and education on income is to take a random sample of American kids ranging from IQ 50 to 150, and send them all to Princeton, and instruct the professors to give them all a Magna Cum Laude AB in English, and instruct all the other students to network with them all equally, and then send them all out into the world to see who makes the most money with their fancy credential.

I have a feeling that if you controlled for education under these experimental conditions, you might even get a higher correlation between IQ and income then the 0.4 in the uncontrolled general population, because almost everyone with an IQ below 115 would be incapable of even doing the jobs their fancy degrees qualified them for, and would have nothing left to fall back on. And because the experimental sample has a wide range of IQs, we also don’t get the problem of range restriction that normally limits correlations in educationally homogeneous groups.

But even among those capable of doing the jobs, I would expect only a small decline in the IQ-income relation, because having assigned random people of different IQs the same degree, we don’t get the phenomenon of the lower IQ person having compensatory assets that normally occurs when people of different IQs obtain the same degree.

Alternatively, if we took a random group of Americans ranging from IQ 50 to 150, and denied them any formal schooling at all, it would be interesting to see the correlation between IQ and income. Once again, I think the correlation could possibly be even higher than in the uncontrolled general population, because with no schooling at all, high IQ people would be far more likely to acquire the basic literacy, numeracy, and social skills required to hold a job, while low and mediocre IQ people would simply end up unemployed, in jail, or homeless.

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