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IQ and national productivity

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  • Garett Jones

Abstract

A recent line of research in economics and psychology hypothesizes that differences in national average intelligence, proxied by IQ tests, are important drivers of national economic outcomes. Cross-country regressions, while showing a robust IQ-growth relationship, cannot fully test this hypothesis. Thus, recent work explores the micro-foundations of the IQ-productivity relationship. The well-identified psychological relationship between IQ and patience implies higher savings rates and higher folk theorem-driven institutional quality in high average IQ countries. Experiments indicate that intelligence predicts greater pro-social behavior in public goods and prisoner’s dilemma games, supporting the hypothesis that high national average IQ causes higher institutional quality. High average IQ countries also have higher savings intensity by a variety of measures. Other possible IQ-productivity channels are discussed, as are possible environmental causes of differences in national average IQ.

Suggested Citation

  • Garett Jones, 2011. "IQ and national productivity," The New Palgrave Dictionary of Economics, Palgrave Macmillan.
  • Handle: RePEc:pal:dofeco:v:5:year:2011:doi:3866
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    Citations

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    Cited by:

    1. Gensowski, Miriam, 2014. "Personality, IQ, and Lifetime Earnings," IZA Discussion Papers 8235, Institute for the Study of Labor (IZA).
    2. Weil, David N., 2014. "Health and Economic Growth," Handbook of Economic Growth,in: Handbook of Economic Growth, edition 1, volume 2, chapter 3, pages 623-682 Elsevier.
    3. Daniele, Vittorio, 2013. "Does the intelligence of populations determine the wealth of nations?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 46(C), pages 27-37.

    More about this item

    Keywords

    Cognitive ability; economic growth; education; human capital; time preference; institutions; cooperation; prisoner’s dilemma; IQ; intelligence; capital; strategic complementarities; intelligence quotient; IQ tests; GDP; average worker productivity; cognitive skill;

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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