Effects of Increases in IQ in India on the Present Value of Lifetime Earnings: A Structured Expert Judgment Study
Many policy interventions targeting the health of infants and young children are thought to raise cognitive performance. This study finds that in India, large-scale measures that effectively raise IQ would have substantial economic benefits.
Policymakers considering interventions that improve cognitive performance (IQ) need estimates of the value of IQ improvements. Using the classical model of structured expert judgment, we develop estimates of the percentage increase in earned income from interventions to increase IQ in India. Our estimates vary with age, for boys and girls, for urban areas and all of India, and also reflect expert’s uncertainty. We combine these estimates with data on wages and labor force participation from the Indian Human Development Survey and use lifetables for India to calculate the expected discounted gain in lifetime earnings from a hypothetical gain of one IQ point (per capita), in both Indian Rupees and US dollars. We contrast our estimates with earlier estimates for the United States, including those used by regulatory agencies in the United States. Our results (which range from low tens to low hundreds of dollars per capita, depending on gender and discount rates), suggest that large scale interventions that are effective in raising cognitive performance in India would have large economic benefits.
Key findings
- We estimate the present value of gains in lifetime income in India from improvements in cognitive performance, using structured expert judgment, labor market data, and lifetables.
- Our estimates distinguish between boys and girls as well as urban areas and all of India, and incorporate experts’ uncertainty.
- We find that a 1-point IQ gain would raise per capita income from the low tens to the low hundreds of dollars, depending on gender and discount rates.
