The more someone earns the smarter they are? A new study provides the answer: yes, up to a point. From there it’s a matter of luck and connections
“I knew the!” one will think reading this article, bringing to mind someone they know with an excessively high income. “Surely it can’t be intelligence alone that makes some people earn such salaries!” And whoever thinks this is absolutely right. People who earn an incredible amount of money does not automatically mean that they are very smart.
A new study published in the scientific journal European Sociological Review with researchers from several European universities was able to confirm what many of you may feel just by observing your company’s senior management. Up to a point intelligence and monetary rewards are indeed correlated. But beyond that there are other factors that determine a person’s financial success.
In this particular study, the scientists examined data from 60,000 Swedish men, having access to the incomes they declared to the tax office as well as the results of a special intelligence test they completed during their enlistment in the army.
“The data we have obtained is incredible,” says Mark Koisnig, one of the authors of the study. He is Professor of Sociology at the University of Leipzig and Associate Professor at the Institute for Analytical Sociology at Lindköping University in Sweden. This property also made it possible for him to access the Swedish data.
Correlation of salary and intelligence
While annual income is easier to record, counting intelligence is a more complicated process. All participants took the same test between the ages of 18 and 19. It is the so-called “Armed Forces Qualification Test” (AFQT), an Armed Forces qualification test used by the Swedish military to assess the cognitive abilities of young men.
Professor Koisnig regrets that women were not part of his study. “This does not satisfy us. We proceeded based on only the available data that we had, the women did not need to have this test.” In order to ensure objectivity, the researchers only considered data from years in which all Swedish men had to undergo this test.
“We linked measures of intelligence when taking this particular test with measures of their success in the labor market later in life,” explains Professor Koisnig. This practically means that the researchers track the men’s annual income over a period of ten years, where the participants are between 35 and 45 years old, and from this they calculate the average of the corresponding annual income.
Intelligence is not everything
“The results showed that there are three different levels in the labor market,” notes Professor Koisnig. Up to a certain level of income, salary does not appear to be associated with cognitive ability. People start making money without researchers noticing more cognitive abilities. “In the top 50% of participants we see a very strong connection between income and cognitive skills.”
Nevertheless, this clear correlation disappears when the income exceeds 60,000 euros, as the professor mentions, stating that the further increase in income is not accompanied by a corresponding increase in cognitive abilities. The top percentage of their study participants, however, are not intelligence “monsters” either. According to Koisnig’s study, the top 1% of participants with the highest income of 200,000 euros may make twice as much as the next percentage point, but it is also “an idea less awake”.
So the good news is that your better-paid boss isn’t necessarily smarter than you. The bad news is that he may just have been luckier or his network may have helped him make easier career leaps. The fact that skills other than intelligence can contribute to (financial) success should be taken as a consolation. In any case, resistance to stress and good contact with people do not hurt.
With a wealth of experience honed over 4+ years in journalism, I bring a seasoned voice to the world of news. Currently, I work as a freelance writer and editor, always seeking new opportunities to tell compelling stories in the field of world news.