The hyperlink between IQ and revenue is overrated


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Garett Jones was the one who first put me on to this concept, now it’s in a Bloomberg column, excerpt:

The proof is putting. One examine of CEOs of enormous Swedish firms discovered that on common they ranked on the 83rd percentile of measured IQ (for CEOs of smaller firms, the rank was the 66th percentile). That’s above common, but it surely’s hardly a cluster on the prime of the distribution. Many CEOs undoubtedly achieved their place by way of arduous work, charisma, individuals expertise and different skills, to not point out luck.

Within the broader distribution, the connection between IQ and revenue can be optimistic however underwhelming. One examine concluded that transferring from the twenty fifth to the seventy fifth percentile of IQ correlates with a ten% to 16% increase in earnings. Which will really feel vital whenever you get it, but it surely doesn’t push you into a complete new socioeconomic class.

The connection between IQ and achievement on the very highest tiers is in my opinion nonetheless an open query.  Listed here are some latest outcomes, in my opinion not but confirmed as the right total viewpoint:

One latest examine, additionally primarily based on Swedish knowledge, confirmed two outcomes of significance. First, a lot of the intelligence-earnings correlation weakens considerably and plateaus above salaries of 60,000 euros a 12 months. Second, and maybe extra stunning, individuals within the prime 1% of earners had decrease IQs than the earners instantly beneath them.

Why that’s the case, it’s arduous to say. However one chance is that the very smartest individuals want a extra balanced life reasonably than working on a regular basis. Or maybe they like occupations with increased standing and considerably decrease pay. Cash isn’t the one factor you possibly can take pleasure in. Possibly having loads of it could possibly make it tougher to belief potential pals or spouses.



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