Childhood Cognitive Ability Predicts Adult Financial Well-Being

Abstract

This study set out to investigate to what extent childhood cognitive ability, along with personality traits, education and occupational status, as well as marital status influence adult financial success. Data were drawn from a large, prospective birth cohort in the UK, the National Child Development Study (NCDS). The analytic sample was comprised of 4537 cohort members with data on parental social class (at birth), cognitive ability (at age 11), educational qualifications (at age 33), personality traits (at age 50), current marital status and occupational prestige, and salary/wage earning level (all measured at age 54). Correlational results showed that parental social class, childhood cognitive ability, traits extraversion, emotional stability, conscientiousness, and openness, being married positively, being divorced or separated negatively, education and occupation as well as gender were all significantly associated with adult earning ability (p < 0.05 to p < 0.001). Effect sizes for the relationship between intelligence and income was moderate. Results of a multiple regression analysis showed that childhood cognitive ability, traits conscientiousness and openness, educational qualifications and occupational prestige were significant and independent predictors of adult earning ability accounting for 30% of the total variance. There was also a gender effect on the outcome variable. Numerous limitations are noted.

Social-Demographic Indicators, Cognitive Ability, Personality Traits, and Region as Independent Predictors of Income: Findings from the UK Household Longitudinal Study (UKHLS)

“…This study replicated the results of various others using different measures of intelligence and personality and different populations in terms of size and nationality. In accordance with many other studies, the strongest correlates of monthly (and annual) salary and accumulated wealth are education and occupation, which are usually closely related [7,8]. In this study, educational qualifications and occupational status were correlated r = 0.47 which is similar to many other studies.…”

“…The different disciplines emphasize different factors that are associated with the financial status of people in adulthood. Previous studies have established findings on the links between family background, childhood intelligence, and later educational and occupational outcomes [2,3,4,5,6,7,8,9,10,11,12,13,14,15]. There are obvious associations between demographic variables and income: males tend to obtain higher salaries than females, older people are paid more than younger people, and those from richer regions (i.e., capital cities) are paid more than those from poorer regions (i.e., countryside or deprived regions).…”

“…In another study, Furnham and Cheng [8] examined a sample comprised of 4537 British adults in a longitudinal study, which was primarily interested in their salary/wage earning measured at age 54. Correlational results showed that parental social class, childhood cognitive ability, traits extraversion, emotional stability, conscientiousness, openness, education, and occupation, as well as gender, were all significantly associated with adult earning ability.…”

The stability of educational achievement across school years is largely explained by genetic factors

“…In fact, educational achievement has been shown to be a good predictor of many life outcomes, such as occupational status, happiness, health, and even life expectancy. 1–5 Influences on educational achievement, including genetic and environmental etiologies, can best be studied during the period of compulsory education when the full range of family characteristics is represented. Compulsory education in the UK culminates with standardized nation-wide exams, the General Certificate of Secondary Education (GCSE).…”

Cognitive ability and education: How behavioural genetic research has advanced our knowledge and understanding of their association

“…As countries' economies gradually shift away from mass production towards becoming knowledge economies, governments are eager to increase the skills and welfare of the population through educational attainment (OECD, 2018). Higher levels of educational attainment are associated with higher employment rates, better job prospects and higher earnings (Furnham & Cheng, 2016;Oreopoulos & Salvanes, 2011;.…”