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

  • Garett Jones
  • W. Schneider

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 intelligence tests provide one useful measure of human capital. Using a new database of national average IQ, we show that in growth regressions that include only robust control variables, IQ is statistically significant in 99.8% of these 1330 regressions, easily passing a Bayesian model-averaging robustness test. A 1 point increase in a nation’s average IQ is associated with a persistent 0.11% annual increase in GDP per capita. Copyright Springer Science + Business Media, Inc. 2006

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File URL: http://hdl.handle.net/10.1007/s10887-006-7407-2
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Article provided by Springer in its journal Journal of Economic Growth.

Volume (Year): 11 (2006)
Issue (Month): 1 (03)
Pages: 71-93

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Handle: RePEc:kap:jecgro:v:11:y:2006:i:1:p:71-93
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