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Intelligence, Human Capital, and Economic Growth: A Bayesian Averaging of Classical Estimates (BACE) Approach

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Author Info

  • Garett Jones

    (Southern Illinois University Edwardsville)

  • W. Joel Schneider

    (Illinois State University)

Abstract

Human capital plays an important role in the theory of economic growth, but it has been difficult to measure this abstract concept. We survey the psychological literature on cross-cultural IQ tests, and conclude that modern intelligence tests are well-suited for measuring an important form of a nation’s human capital. Using a new database compiled by Lynn and Vanhanen (2002) along with a Bayesian methodology derived from Sala-i-Martin, Doppelhofer, and Miller (AER, 2004), we show that national average IQ has a robust positive relationship with economic growth. In growth regressions that include only robust control variables, IQ is statistically significant in 99.8% of these 1330 regressions, and the IQ coefficient is always positive. A strong relationship persists even when OECD countries are excluded from the sample. A 1 point increase in a nation’s average IQ is associated with a persistent 0.11% annual increase in GDP per capita.

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Bibliographic Info

Paper provided by EconWPA in its series Development and Comp Systems with number 0507005.

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Length: 48 pages
Date of creation: 11 Jul 2005
Date of revision:
Handle: RePEc:wpa:wuwpdc:0507005

Note: Type of Document - pdf; pages: 48
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Web page: http://128.118.178.162

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Keywords: Economic Growth; Human Capital; Intelligence; IQ; Education;

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References

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  1. Gary Koop & Simon Potter, 2003. "Forecasting in Large Macroeconomic Panels using Bayesian Model Averaging," Discussion Papers in Economics 04/16, Department of Economics, University of Leicester.
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Citations

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Cited by:
  1. Patricia Prüfer & Gabriele Tondl, 2009. "The FDI-Growth Nexus in Latin America: The Role of Source Countries and Local Conditions," DEGIT Conference Papers c014_025, DEGIT, Dynamics, Economic Growth, and International Trade.
  2. Jörg Baten & Dorothee Crayen & Joachim Voth, 2007. "Poor, hungry and ignorant: Numeracy and the impact of high food prices in industrializing Britain, 1780-1850," Economics Working Papers 1120, Department of Economics and Business, Universitat Pompeu Fabra, revised Dec 2011.
  3. Dmitry V. Kovalevsky, 2011. "Structural Dynamic Economic Model SDEM-2," DEGIT Conference Papers c016_043, DEGIT, Dynamics, Economic Growth, and International Trade.
  4. Westling, Tatu, 2011. "Male organ and economic growth: does size matter?," MPRA Paper 32302, University Library of Munich, Germany.
  5. Ulaşan, Bülent, 2012. "Cross-country growth empirics and model uncertainty: An overview," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy, vol. 6(16), pages 1-69.
  6. Kodila-Tedika, Oasis, 2012. "Governance and Intelligence: Empirical Analysis from African Data," MPRA Paper 39937, University Library of Munich, Germany.
  7. Dalgaard, Carl-Johan & Strulik, Holger, 2010. "The History Augmented Solow model," Diskussionspapiere der Wirtschaftswissenschaftlichen Fakultät der Leibniz Universität Hannover dp-460, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
  8. Niklas Potrafke, 2011. "Intelligence and Corruption," Working Paper Series of the Department of Economics, University of Konstanz 2011-36, Department of Economics, University of Konstanz.
  9. Isaac Kalonda-Kanyama & Oasis Kodila-Tedika, 2012. "Quality of Institutions: Does Intelligence Matter?," Working Papers 308, Economic Research Southern Africa.
  10. Galor, Oded & Michalopoulos, Stelios, 2006. "The Evolution of Entrepreneurial Spirit and the Process of Development," CEPR Discussion Papers 6022, C.E.P.R. Discussion Papers.
  11. Ulaşan, Bülent, 2011. "Cross-country growth empirics and model uncertainty: An overview," Economics Discussion Papers 2011-37, Kiel Institute for the World Economy.
  12. Lim, Jamus Jerome & Adams-Kane, Jonathon, 2008. "Institutions, Education, and Economic Performance," MPRA Paper 11800, University Library of Munich, Germany.

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