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Human Capital and National Institutional Quality: Are TIMSS, PISA, and National Average IQ Robust Predictors?

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  • Garett Jones
  • Niklas Potrafke

Abstract

Is human capital a robust predictor of good institutions? Using a new institutional quality measure, the International Property Rights Index (IPRI), we find that cognitive skill measures are significant, robust, and large in magnitude. We use two databases of cognitive skills: estimates of national average IQ from Lynn and Vanhanen (2012a) and estimates of cognitive ability based on Programme for International Student Assessment (PISA) and Trends in International Mathematics and Science Study (TIMSS) scores estimated by Rindermann et al. (2009). The Rindermann cognitive ability scores estimate mean performance as well as performance at the 5th and 95th percentiles of the national population. National average IQ and the 95th percentile of cognitive ability are both robust predictors of overall institutional quality controlling for legal system, GDP per capita, geography dummies, and years of total schooling. Some possible microfoundations of this relationship are discussed.

Suggested Citation

  • Garett Jones & Niklas Potrafke, 2014. "Human Capital and National Institutional Quality: Are TIMSS, PISA, and National Average IQ Robust Predictors?," CESifo Working Paper Series 4790, CESifo.
    • Handle: RePEc:ces:ceswps:_4790
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    7. Mohammad Reza Farzanegan, 2020. "Cognitive ability and corruption: rule of law (still) matters," Empirical Economics, Springer, vol. 59(4), pages 1723-1743, October.
    8. Elbahnasawy, Nasr G., 2021. "Can e-government limit the scope of the informal economy?," World Development, Elsevier, vol. 139(C).
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    More about this item

    Keywords

    institutions; human capital; intelligence; PISA;
    All these keywords.

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • I20 - Health, Education, and Welfare - - Education - - - General

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