FLynn-effect and economic growth: Do national increases in intelligence lead to increases in GDP?

According to the cognitive human capital theory, cognitive ability furthers at the individual, institutional and societal level productivity, production, income and wealth. Cross-sectional and longitudinal studies using various indicators (psychometric IQs, student assessment tests, education vs. GDP per capita, growth), different methods (correlations, regressions, path models) and different controls have supported this theory in two research paradigms (psychology, economics). An especially revealing test is, whether historical increases in IQ within countries would lead to later economic growth, i.e. about 10 to 20 years later. This design can exclude national differences being associated with human capital and growth (e.g., in culture, economic freedom and politics) which may bias the results. We used a data set of national IQ changes (“FLynn effect”) from Pietschnig and Voracek (2015). For a maximum of 28 nations and 262 periods between 1909 and 2013 IQ development was related to concurrent or lagged GDP per capita development (growth; 5, 10, 15, 20 years). In a second analysis with at least three IQ-GDP periods per country the single within-country correlations for concurrent and later intervals were estimated (13 nations). Finally, we controlled for previous wealth (advantages of backwardness). All analyses show substantial relationships between increases in IQ and GDP, the highest were found for the 5 to 15 years lagged economic growth (r = .25 to .44 resp. .46 to .77). The results back the theory that cognitive ability contributes to wealth.