January 24, 2011

Taller people are smart too

It has already been a classical finding (not referring to the school of thought) that taller workers receive a substantial wage premium and this wage premium is attributed to non-cognitive abilities. But what about the accepted standard that intelligence (and hence cognitive abilities) exlain the often cited skill-bias wage premium?

Well, in their latest NBER working paper entitled "Height as a Proxy for Cognitive and Non-Cognitive Ability," Andreas Schick and Richard Steckel may have managed to bridge that gap. They recognize that nutrition, which is a determinant of adult height, is also important to cognitive and non-cognitive development:

"Using data from Britain’s National Childhood Development Study (NCDS), we show that taller children have higher average cognitive and non-cognitive test scores, and that each aptitude accounts for a substantial and roughly equal portion of the stature premium."

So, bottomline is, it shouldn't be surprising that we generally see taller people have higher wages. Taller people have higher wages because they're smart enough to land a high-paying job. Or at least firms hiring them think they are smart enough to give them high-paying jobs.

This also explains why most athletic people I know are very intelligent. I mean think about it. You have to be very smart to also have very good hand-eye coordination (basketball players, quarterbacks, receivers, etc.).