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Having smart neighbors could mean a higher income for you

Reuters/China Stringer Network
Why an obsession with testing makes sense.
Published Last updated This article is more than 2 years old.

We know that intelligence matters at the level of the individual, impacting performance in school, work, and life. Decades of research supports that point. But what if your personal intelligence level doesn’t matter as much as the average level of intelligence of the country in which you live? This is what economist Garett Jones of George Mason University calls the “paradox of IQ” in his new book Hive Mind: How Your Nation’s IQ Matters So Much More Than Your Own.

Jones discovered this paradox when researching the link between IQ and income with his colleague W. Joel Schneider. Within a country, the link between IQ and income appears modest, with one IQ point predicting 1% higher income per person. But across countries, that same IQ point predicts 6% higher income per person. Why would it be that the IQ of the country you live in matters more than your individual IQ for predicting eventual income? This led Jones on a quest to explore some of the reasons why this might be, and potential implications of this paradox, discussed in detail in his new book.

In an interview, Jones told Quartz, “If something appears to matter more for a nation than it does for an individual, that something may well be causing positive side effects.” He described three key paths that may generate positive side effects: the links between IQ and patience, cooperation, and team performance. A fourth path, the productivity of those around you, multiplies the impact of the other three. All these paths are supported by research studies spanning psychology, economics, management, and political science, specifically large research syntheses or meta-analyses.

Intelligence predicts greater patience

Smarter people are more likely to be more patient, delaying gratification and being willing to wait for rewards. A meta-analysis by Noah Shamosh and Jeremy Gray supports this point. Here’s how Jones explains the link: “When you’re more patient you save more [money], and some of that money has a tendency to stay in your home country. So nations with high savings rates tend to have more funds available for business investment. If you have more patient neighbors, you’ll be able to borrow some of their money down the road.”

Intelligence predicts more pro-social behavior

A meta-analysis by Sudeep Sharma, William Bottom, and Hillary Elfenbein found that higher intelligence predicted greater win-win, pie-growing, pro-social behavior. Jones explains, “We need political leaders who cut deals rather than start wars, who find ways to grow the economic pie rather than battle over a slightly larger slice. And politicians rarely reap most of the benefits of cooperation: Most of the benefits spill over to the whole nation…In many social settings, but not all, intelligent groups are more cooperative. One reason we’d predict smarter groups to be more cooperative is because they tend to be more patient. And more patient people care more about their reputations, they care more about the long-run benefits that come from building a norm of cooperation.”

Intelligence predicts greater team performance

A meta-analysis by Dennis Devine and Jennifer Philips examining team IQ and productivity in both lab and real work settings found that the average IQ of a team was a reasonably good predictor of team performance. Jones explains, “Much of the economy is a team effort, whether the team is workers in a firm, different businesses collaborating along a supply chain, or of course politicians and bureaucrats trying to build a healthy economy…Since team tasks are where so much of our economy’s value is created—in engineering firms, in hospital operating rooms, in Hollywood blockbusters—anything that enhances team productivity probably matters a lot for the economy’s overall health.”

If you’re around more productive people, you’ll be more productive yourself

Finally, a brand new meta-analysis by Daniel Herbst and Alexandre Mas looked at both lab and field studies, uncovering that if your coworkers became 10% more productive, that should increase your productivity by 1.2%. Jones explains, “Our work performance is often shaped by our peers, at least a little, and we shape our peers in return. This is yet another side effect of having neighbors with higher test scores: Not only do they save more, not only do they set an example of cooperation, but they also set a higher standard of performance that the average person emulates, at least a little. Those around us shape whom we become.”

So what’s the takeaway for the individual? According to Jones, it’s that “being around smart people is more important than you being smart yourself. It means that if you want to raise your long run economic well-being, you should care a lot about your country’s average test scores. The effect is about three times at the cross-country level than at the US state level, so it might not be worth it to move across state lines to get smarter neighbors, but I can’t deter you if you want to move to Singapore, it’s a great place.”

Jones argues that medical and educational research should be directed on how to credibly raise test scores: “It should be a global obsession on the scale of cancer research.” Jones acknowledges that he isn’t certain whether it’s the average IQ level of the entire nation or the average IQ level of the smartest people of that nation that matters most for long-run economic health. However, he stresses that many nations should consider how migration may shape their nation’s average test scores in the long run. For example, “The United Arab Emirates and Qatar, for instance, are two of just a handful of nations where migration policy substantially raises national average test scores. That’s a brave thing to do, and it’s a way to shape a more prosperous future. High human capital immigration policies, the kind embraced by Hong Kong and Singapore, tend to make a nation’s economic future brighter. These nations are choosing some of their future citizens, and they’re very likely building a stronger hive mind.”

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