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Not so fast Mr. Rich Smarty-pants. New research shows extreme high-income earners might not be as smart as we thought.

Thinker sculpture in Paris, France

A new study from Linköping University reveals that people with higher incomes also score higher on IQ tests – up to a certain point. At high incomes, the relationship levels off, and the top 1% even score slightly lower on the test compared to those just below them. This suggests that you can’t assume someone is highly intelligent just because they have a high income.

The researchers combined wage data from Swedish population registers with scores from cognitive ability tests taken from military conscripts at age 18-19. They found that the relationship between cognitive ability and wage is strong for most people across the wage spectrum, but above a certain threshold wage, wage stops playing a role in differentiating people of varying abilities.

Above €60,000 in annual wages, average ability plateaus at a modest level of +1 standard deviation. The top 1% of earners even score slightly worse on cognitive ability compared to those in the income bracket just below them. This is significant because the top 1% earn salaries that are twice as high as the average salary among the top 2-3%.

In recent years, rising income inequality has been a hot topic of discussion. Some argue that top earners deserve their high salaries because of their unique talents. However, this study finds no evidence that those with top jobs that pay extraordinary wages are more deserving based on cognitive ability compared to those who earn half those wages.

For most people, their salary is directly related to their cognitive abilities. But among top earners, cognitive ability levels don’t differentiate their salaries. Similarly, differences in job prestige between professions like accountants, doctors, lawyers, professors, judges, and politicians are unrelated to their cognitive abilities. As the relative incomes of top earners continue to grow in Western countries, an increasing portion of total earnings may be allocated in ways unrelated to cognitive capability, according to the researchers.

Image Credits

In-Article Image Credits

Thinker sculpture in Paris, France via Wikimedia Commons by Le Penser de Rodin with usage type - Creative Commons License. October 29, 2011

Featured Image Credit

Thinker sculpture in Paris, France via Wikimedia Commons by Le Penser de Rodin with usage type - Creative Commons License. October 29, 2011

 

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