National IQ and National Productivity: The Hive Mind Across Asia

Abstract

A recent line of research demonstrates that cognitive skills - intelligence quotient scores, math skills, and the like - have only a modest influence on individual wages, but are strongly correlated with national outcomes. Is this largely due to human capital spillovers? This paper argues that the answer is yes. It presents four different channels through which intelligence may matter more for nations than for individuals: (i) intelligence is associated with patience and hence higher savings rates; (ii) intelligence causes cooperation; (iii) higher group intelligence opens the door to using fragile, high-value production technologies; and (iv) intelligence is associated with supporting market-oriented policies. Abundant evidence from across ADB member countries demonstrates that environmental improvements can raise cognitive skills.

Keywords: national productivity, intelligence, environmental influence

JEL Classification: O41, J24