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Iq In The Production Function: Evidence From Immigrant Earnings

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  • GARETT JONES
  • W. JOEL SCHNEIDER

Abstract

"We show that a country's average IQ score is a useful predictor of the wages that immigrants from that country earn in the United States, whether or not one adjusts for immigrant education. Just as in numerous microeconomic studies, 1 IQ point predicts 1% higher wages, suggesting that IQ tests capture an important difference in cross-country worker productivity. In a cross-country development accounting exercise, about one-sixth of the global inequality in log income can be explained by the effect of large, persistent differences in national average IQ on the private marginal product of labor. This suggests that cognitive skills matter more for groups than for individuals." ("JEL" J24, J61, O47) Copyright (c) 2009 Western Economic Association International.

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Bibliographic Info

Article provided by Western Economic Association International in its journal Economic Inquiry.

Volume (Year): 48 (2010)
Issue (Month): 3 (07)
Pages: 743-755

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Handle: RePEc:bla:ecinqu:v:48:y:2010:i:3:p:743-755

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Cited by:
  1. Potrafke, Niklas, 2012. "Intelligence and corruption," Munich Reprints in Economics 19275, University of Munich, Department of Economics.
  2. Isaac Kalonda-Kanyama & Oasis Kodila-Tedika, 2012. "Quality of Institutions: Does Intelligence Matter?," Working Papers 308, Economic Research Southern Africa.
  3. Jones, Garett, 2012. "Cognitive skill and technology diffusion: An empirical test," Economic Systems, Elsevier, vol. 36(3), pages 444-460.
  4. Morgan Kelly & Joel Mokyr & Cormac Ó Gráda, 2013. "Precocious Albion: a New Interpretation of the British Industrial Revolution," Working Papers 201311, School Of Economics, University College Dublin.
  5. Kodila-Tedika, Oasis, 2012. "Governance and Intelligence: Empirical Analysis from African Data," MPRA Paper 39937, University Library of Munich, Germany.

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