Skip Links

You don't have to be cruel to be kind nor smart to be rich, study finds

By Layer 8 on Wed, 04/25/07 - 11:12am.

It doesn't take a rocket scientist to make a lot of money, according to a nationwide study that found people of below average intelligence were, overall, just about as wealthy as those in similar circumstances but with higher scores on an IQ test.

Furthermore, a number of extremely intelligent people stated they had gotten themselves into financial difficulty. The one financial indicator in which the study found it paid to be smart was income. Those with higher IQ scores tended to get paid more than others.

While other research has also found the IQ-income link, this is one of the first studies to go beyond income to look at the relationship between intelligence and wealth and financial difficulty.

"People don't become rich just because they are smart," said Jay Zagorsky, author of the study and a research scientist at Ohio State University 's Center for Human Resource Research in a statement. "Your IQ has really no relationship to your wealth. And being very smart does not protect you from getting into financial difficulty."

The study is based on data from 7,403 Americans who participated in the National Longitudinal Survey of Youth, which is funded primarily by the U.S. Bureau of Labor Statistics. The NLSY is a nationally representative survey of people, who are now in their mid-40s, conducted by Ohio State's Center for Human Resource Research. The same people have been interviewed repeatedly over time since 1979. This study is based on responses from the 2004 survey.

The results confirmed research by other scholars that show people with higher IQ scores tend to earn higher incomes. In this study, each point increase in IQ scores was associated with $202 to $616 more income per year. That means the average income difference between a person with an IQ score in the normal range (100) and someone in the top 2% of society (130) is currently between $6,000 and $18,500 a year.

The findings revealed mixed results when it came to the link between intelligence and measures of financial distress. For example, the percentage of people who have maxed out their credit cards rises from 7.7 percent in those with an IQ of 75 and below to a peak of 12.1 percent among those with an IQ of 90. Then the percentage falls in an irregular pattern to 5.4 percent among those with an IQ of 115 before rising again.

"Intelligence is not a factor for explaining wealth. Those with low intelligence should not believe they are handicapped, and those with high intelligence should not believe they have an advantage," Zagorsky said.