December 29, 2008
Taller People Make More Money
In Making Sense of the Labor Market Height Premium: Evidence From the British Household Panel Survey (NBER Working Paper No. 14007), authors Anne Case, Christina Paxson, and Mahnaz Islam use nine waves of the British Household Panel Survey (BHPS) to investigate the large labor market height premium observed in the data, where each inch of height is associated with a 1.5% increase in wages, for both men and women. They find that half of the height premium can be explained by the association between height and educational attainment among BHPS participants. Of the remaining premium, half can be explained by taller individuals selecting into higher status occupations and industries. These effects are consistent with the authors' earlier findings that taller individuals on average have greater cognitive function, which manifests in greater educational attainment, and better labor market opportunities. ... Case and her co-authors also note that the height premium may be masked by looking within occupation if, as is apparent in the data, taller people sort into better paid occupations.
The findings in the NBER paper suggest that the association between height and earnings may be driven by the influence of early life health and nutrition on adult height, educational attainment, and occupational choice.
This provides support for the historical curiosity that the taller presidential candidate (beginning with 6' 2" George Washington (v. 5' 7" John Adams) through 6' 1" Barack Obama (v. 5' 6" John McCain) has won the popular vote 66% of the time:
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One theory (http://www.slate.com/id/2148759/) is that some kinds of childhood disease / deprivation lead to lower height and lower IQ, explaining the correlation. Or as Slate less-than-tactfully puts it, "Tall people earn more because they're smarter."
Posted by: taxrascal | Dec 31, 2008 11:06:27 AM