Tuesday, August 29, 2006

New Perspective on the Height Premium

A few weeks back, I discussed new research that finds an earnings premium for college-educated, left-handed men. Last week, while I was away, the economics blogoshpere was abuzz with new research on the advantages of another of my attributes -- being tall. Previously, I discussed the evidence that taller men earn more money -- specifically discussing the Nicola Persico, Andy Postlewaite, and Dan Silverman argument that this is due to the effect of height on self-esteem and social development in adolescence. However, a new NBER WP by Anne Case and Christina Paxson challenges this interpreting of the height premium by showing that taller children (who are more likely to become taller adults) perform better on cognitive tests. The abstract:
It has long been recognized that taller adults hold jobs of higher status and, on average, earn more than other workers. A large number of hypotheses have been put forward to explain the association between height and earnings. In developed countries, researchers have emphasized factors such as self esteem, social dominance, and discrimination. In this paper, we offer a simpler explanation: On average, taller people earn more because they are smarter. As early as age 3 — before schooling has had a chance to play a role — and throughout childhood, taller children perform significantly better on cognitive tests. The correlation between height in childhood and adulthood is approximately 0.7 for both men and women, so that tall children are much more likely to become tall adults. As adults, taller individuals are more likely to select into higher paying occupations that require more advanced verbal and numerical skills and greater intelligence, for which they earn handsome returns. Using four data sets from the US and the UK, we find that the height premium in adult earnings can be explained by childhood scores on cognitive tests. Furthermore, we show that taller adults select into occupations that have higher cognitive skill requirements and lower physical skill demands.

haha, I just stumbled across the same article while reading Slate and was about to email you about it. thank goodness i avoided redunancy by checking your blog first to see if you had already found it.
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