Human Capital and National Institutional Quality: Are TIMSS, PISA, and National Average IQ Robust Predictors?

23 Pages Posted: 4 Jun 2014

See all articles by Garett Jones

Garett Jones

George Mason University - Department of Economics; George Mason University - Mercatus Center

Niklas Potrafke

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute

Date Written: May 3, 2014

Abstract

Is human capital a robust predictor of good institutions? Using a new institutional quality measure, the International Property Rights Index (IPRI), we find that cognitive skill measures are significant, robust, and large in magnitude. We use two databases of cognitive skills: estimates of national average IQ from Lynn and Vanhanen (2012a) and estimates of cognitive ability based on Programme for International Student Assessment (PISA) and Trends in International Mathematics and Science Study (TIMSS) scores estimated by Rindermann et al. (2009). The Rindermann cognitive ability scores estimate mean performance as well as performance at the 5th and 95th percentiles of the national population. National average IQ and the 95th percentile of cognitive ability are both robust predictors of overall institutional quality controlling for legal system, GDP per capita, geography dummies, and years of total schooling. Some possible microfoundations of this relationship are discussed.

Keywords: institutions, human capital, intelligence, PISA

JEL Classification: D73, I20

Suggested Citation

Jones, Garett and Potrafke, Niklas, Human Capital and National Institutional Quality: Are TIMSS, PISA, and National Average IQ Robust Predictors? (May 3, 2014). CESifo Working Paper Series No. 4790, Available at SSRN: https://ssrn.com/abstract=2445338

Garett Jones

George Mason University - Department of Economics ( email )

4400 University Drive
Fairfax, VA 22030
United States

HOME PAGE: http://economics.gmu.edu/people/gjonesb

George Mason University - Mercatus Center ( email )

3434 Washington Blvd., 4th Floor
Arlington, VA 22201
United States

Niklas Potrafke (Contact Author)

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute ( email )

Poschinger Str. 5
Munich, 01069
Germany

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