A scientific analysis of data from a Swedish register containing measures of cognitive ability of men who took a compulsory military conscription cognitive test and of their labor-market success showed a strong association between cognitive ability and earnings. Individuals with higher cognitive abilities tended to earn more money. However, this was not the case with the highest income earners who all had similar cognitive abilities. The study was published in the European Sociological Review.
It’s a common belief that society’s most successful members possess remarkable talents and abilities. Various mediums, including documentaries, books, and other publications, often highlight the extraordinary capabilities of renowned and accomplished individuals. The conventional wisdom credits outstanding career achievements largely to these individuals’ heightened intelligence.
The past few decades have witnessed a substantial spike in the incomes of the highest earners. In the U.S., the top 1% of earners account for 20% of the national income, excluding capital gains. In contrast, this figure stands at around 9% in Sweden. This elite group also holds significant political and economic influence, underscoring the importance of understanding their cognitive abilities. While expertise and knowledge are undeniably vital for sound decision-making, the intelligence underpinning those decisions remains crucial.
Study author Marc Keuschnigg and his colleagues noted that the number of individuals with extremely high levels of cognitive abilities in the population is very, very small, while the number of individuals with very high earning or in very prestigious positions is much larger. Based on this, they hypothesized that above some level of occupational success, cognitive ability ceases to detectably increase and might even be decreasing.
The team sourced their data from Statistics Sweden, the country’s principal statistical agency. The dataset comprised men who entered the workforce between 1991 and 2003 and had at least a year’s employment.
Their cognitive scores were derived from military conscription test results, narrowing the research sample to men who, at ages 18 or 19, took the mandatory cognitive test either between 1971-1977 or 1980-1999. Military enlistment saw a decline post-1999, dwindling each year until its termination in 2010. The study analyzed data from 59,387 native-born Swedish men, monitoring their labor market outcomes over 11 years.
The Swedish military’s cognitive evaluation comprised distinct tests assessing verbal comprehension, technical understanding, spatial intelligence, and logical reasoning. The researchers gauged labor-market success using two metrics: participants’ average annual salary and their mean occupational prestige during the 11-year span.
Results showed that people with higher wages tended to have higher cognitive abilities and vice versa. This relationship was especially pronounced among individuals with medium to moderately high skills and corresponding wages. Interestingly, the cognitive abilities of the bottom 30%-40% of earners were somewhat consistent, with the least compensated individuals showing slightly higher capabilities than those earning marginally more.
Observations of the top 10% of wage earners indicated minimal variance in their cognitive skills. Intriguingly, the cognitive abilities of the top 1% of earners were marginally below those earning slightly less. However, both these top-earning groups still demonstrated cognitive abilities considerably above the average.
When the study authors looked at prestige of the occupation, the results were similar. The association between prestige of the occupation and cognitive ability was strong in the middle prestige and ability range, but cognitive ability stopped increasing with further increase in occupational prestige for high prestige occupations.
“The empirical results lend support to our argument that cognitive ability plateaus at high levels of occupational success,” the study authors concluded. “Precisely in the part of the wage distribution where cognitive ability can make the biggest difference, its right tail, cognitive ability ceases to play any role. Cognitive ability plateaus around €60,000 at under a standard deviation above the mean. In terms of occupational prestige, it plateaus at a similar level. The differences in the prestige between accountants, doctors, lawyers, professors, judges, and members of parliament are unrelated to their cognitive abilities.”
The study sheds light on the links between cognitive ability and job success. However, it also has limitations that need to be taken into account. Notably, intelligence as measured by a cognitive test in young adulthood is far from being a perfect and complete measure of one’s occupational ability.
Other personal factors are well-known to play important roles in job success. This is particularly likely to be the case for very complex occupations, occupations that apart from natural, inborn intelligence, require extensive training, knowledge and specific personal characteristics (e.g. conscientiousness, integrity) for a person to be successful in them. Additionally, the study was limited to men who underwent conscription and worked in the Swedish labor market environment. Studies on women and people from other societies might not yield equal results.
The study, “The plateauing of cognitive ability among top earners”, was authored by Marc Keuschnigg, Arnout van de Rijt, and Thijs Bo.