National IQ and Economic Development: A Study of Eighty-One Nations

Abstract

The authors examine the hypothesis that the intelligence of the population is a major factor determining national differences in economic development. To test the hypothesis, national IQs were calculated for 81 nations and economic development measured by real Gross Domestic Product at Purchasing Power Parity for 1998. The correlation between the two is .733, indicating that 54 per cent of the variance in GDP is attributable to the IQs of the populations. Since the eighteenth century social scientists have attempted to find solutions to the problem of why some nations have developed economically and become wealthy while others have stagnated economically and remained poor. In contemporary times there are huge differences in per capita income between the economically developed world of North America, Western Europe, Australasia and the Pacific Rim, and the economically underdeveloped world of South Asia, the Caribbean, much of Latin America, and Africa. This problem has been discussed by economists, political scientists, sociologists, psychologists, anthropologists and historians. These have advanced numerous theories of the causes of these disparities, including advantageous or disadvantages climates, the possession of natural resources, economic and political systems, and psychological attitudes and values such as the work ethic. We do not attempt to review all the theories of the causes of the wealth and poverty of nations. This is a subject on which numerous books have been written and with which several journals are concerned, notably the Journal of Economic Growth, the Journal of Comparative Economics, Economic Development and Cultural Change, Development and Change, and Development Economics. Our purpose is to present a new theory that has not been advanced hitherto. This is that a major factor responsible for national disparities in economic development is the intelligence (IQ) of the populations. Theoretical Background: IQ and Earnings among Individuals There are strong theoretical reasons for the theory that the intelligence of national populations is likely to be a significant determinant of economic growth and development. The first of these is that it is well established that intelligence is a significant determinant of incomes among individuals. We believe it is reasonable to treat nations as aggregates of the individuals, so that nations with high average IQs can be expected to have high average earnings. The major studies of the relationship between intelligence and earnings are summarized in Table 1. All of these studies are for the United States. The first entry in the table (Duncan,1968) presents data from the 1964 Current Population Survey carried out by the National Opinion Research Center (NORC) on a sample of white males aged 24-35. The second entry from Jencks (1972) is derived from a synthesis of the American research literature up to 1970. The third and fourth entries (Brown and Johnson,1995) are derived from a study of the relation between the IQ of males measured in early adulthood and earnings approximately 12 years later for samples of 24,819 whites and 4,008 blacks and reported correlations of .327 and .126, respectively. The fifth entry (Murray, 1998) is derived from the National Longitudinal Study of Youth nationally representative American sample of 12,686 and finds a correlation of .37 between the IQ of males measured in adolescence and income approximately twelve years later, assessed in the late twenties to mid-thirties. It is apparent that the four results for whites are closely similar, all lying in the range between .31 and .37 and averaging .34. The one correlation for blacks of .13 is substantially lower but nevertheless statistically significant. The main reason for the lower correlation among blacks is possibly that greater numbers of intelligent blacks born into poverty do not obtain the educational credentials generally required for average to high earnings. …