Intelligence, Human Capital, and Economic Growth: An Extreme Bounds Analysis

Garett Jones and W. Joel Schneider

No 156, Econometric Society 2004 Latin American Meetings from Econometric Society

Abstract: Human capital plays an important role in the theory of economic growth, but it has been difficult to measure this abstract concept. We survey the psychological literature on cross-cultural IQ tests, and conclude that modern intelligence tests are well-suited for measuring an important form of a nation’s human capital. Using a new database compiled by Lynn and Vanhanen (2002), we show that national average IQ has a robust positive relationship with economic growth. Using a methodology derived from Sala-i-Martin (1997a), we show that in growth regressions that include only robust control variables, IQ is statistically significant in 99.7% of these 1330 regressions. A strong relationship persists even when OECD countries are excluded from the sample. Conditional on GDP per capita in 1960 and other control variables, a 1 point increase in a nation’s average IQ is associated with a persistent 0.13% annual increase in GDP per capita

Keywords: Economic Growth; Human Capital; Education (search for similar items in EconPapers)
JEL-codes: I20 J24 O47 (search for similar items in EconPapers)
Date: 2004-08-11
New Economics Papers: this item is included in nep-dev and nep-edu
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Citations: View citations in EconPapers (2)

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