Effects of Increases in IQ in India on the Present Value of Lifetime Earnings: A Structured Expert Judgment Study

Randall Lutter, Abigail Colson and Roger Cooke

No 17-18, RFF Working Paper Series from Resources for the Future

Abstract: Policymakers considering interventions that improve cognitive performance (IQ) need estimates of the value of IQ improvements. Using the classical model of structured expert judgment, we develop estimates of the percentage increase in earned income from interventions to increase IQ in India. Our estimates vary with age, for boys and girls, for urban areas and all of India, and also reflect expert’s uncertainty. We combine these estimates with data on wages and labor force participation from the Indian Human Development Survey and use lifetables for India to calculate the expected discounted gain in lifetime earnings from a hypothetical gain of one IQ point (per capita), in both Indian Rupees and US dollars. We contrast our estimates with earlier estimates for the United States, including those used by regulatory agencies in the United States. Our results (which range from low tens to low hundreds of dollars per capita, depending on gender and discount rates), suggest that large scale interventions that are effective in raising cognitive performance in India would have large economic benefits.

Date: 2017-10-02
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