IQ, Academic Performance, Environment, and Earnings

Jeffrey S. Zax: University of Colorado at Boulder

Daniel I. Rees: University of Colorado at Denver

The Review of Economics and Statistics, 2002, vol. 84, issue 4, pages 600-616

Abstract: This paper explores the effects of peers, friends, family, IQ, and academic performance, observed in the last year of high school, on earnings at ages 35 and 53. All significantly affect earnings at both ages. The effects of IQ are much smaller than asserted in, for example, The Bell Curve, and badly overstated in the absence of controls for family, wider context, or academic performance. Aspirations appear to be very important. Socialization and role models may be as well, but not ability spillovers. Feasible increases in academic performance and education can compensate for the effects of many cognitive and contextual deficits. Copyright (c) 2002 President and Fellows of Harvard College and the Massachusetts Institute of Technology.

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