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the dismal science: The search for better economic policy.

Short EndTall people earn more because they're smarter.

By Joel Waldfogel
Posted Friday, Sept. 1, 2006, at 1:36 PM ET

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In the late 1970s, Randy Newman scored a hit with a song containing the lyric, "Short people got no reason to live." The line was supposed to be satire, but outraged diminutive listeners didn't see it that way. Boy, are they going to be mad at a couple of economists now.

It is well-documented that short people earn less money than tall people do. To be clear, pay does not vary lock step by height. If your friend is taller than you are, then it's nearly a coin toss whether she earns more. But if you compare two large groups of people who are similar in every respect but height, the average pay for the taller group will be higher. Each additional inch of height adds roughly 2 percent to average annual earnings, for both men and women. So, if the average heights of our hypothetical groups were 6 feet and 5 feet 7 inches, the average pay difference between them would be 10 percent.

But why? One possibility is height discrimination in favor of the tall. A second involves adolescence. A few years ago, Nicola Persico and Andrew Postlewaite of the University of Pennsylvania and Dan Silverman of the University of Michigan discovered that adult earnings are more sharply related to height at age 16 than to adult height—suggesting, scarily, that the high-school social order determined the adult economic order. For boys at least, height at 16 affects things like social and athletic success—scoring chicks and baskets or, as the authors put it, "participation in clubs and athletics." And maybe those things affect later earning power.

That wasn't likely to make short people feel good, but the latest explanation is worse. In a new study, Anne Case and Christina Paxson, both of Princeton University, find that tall people earn more, on average, because they're smarter, on average. Yikes.

Before you blast Case and Paxson with angry e-mails, let's look at their method. With detailed data from the United Kingdom, they followed two groups of kids, one born in 1958 and the other in 1970, through to adulthood. Every few years, the government collected information about height, weight, intelligence, educational experience, and, during adulthood, pay. Based on these data, Case and Paxton document once again that taller people earn more. Then they note that from an early age, height is related to intelligence. Even at age 5, a variety of intelligence measures—based on conceptual maturity, visual-motor coordination, and vocabulary—are higher on average for taller kids.

This sets up the study's major finding. While height, on its own, bears a strong relation to pay, when adult height is included along with measures of childhood intelligence in pay analyses, it no longer does the explanatory work on its own. Height appears to matter, when intelligence is not included, because taller people are, on average, smarter.

So, why did height at age 16 bear a stronger relationship than adult height to adult earnings in the earlier study by Persico, Postlewaite, and Silverman? Case and Paxson point out that kids who are tall at age 16 are those who have experienced their adolescent growth spurts at a relatively early age. And they point out that these kids turn out to be the well-fed and nurtured kids of parents who are on average smarter and richer than the rest, and who also pass on extra IQ points. The 16-year-old taller kids end up earning more for reasons apart from their height.

If taller people are, on average, smarter, then we should see taller people working disproportionately in occupations that require intelligence. Sure enough, in an analysis of U.S. data from the National Health Interview Survey, Case and Paxson find that taller people are more prevalent in occupations such as executive/manager, professional, and sales relative to occupations like laborer, farmer, or machine operator.

Higher intelligence resolves the puzzle of higher pay for the tall but begs the question of why height and intelligence are related in the first place. It is possible that early childhood care, including prenatal care, can increase both height and cognitive ability. But maybe the Fates just have it in for short people.

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