Tuesday, August 4, 2009

Do tall people earn more?

The Globe and Mail published reported on August 4, 2009 that taller individuals earn more than the rest (Survival of the hottest). The author Dave McGinn cites academic research that calculated "$789 (U.S.) more in pay each month" for every additional inch in height. He further estimates a $5,525 difference in pay per year between a 6 feet tall individual and the one standing 5 feet 5 inches tall.

His numbers are correct for the annual difference in wages, but are wrong for the monthly wage difference. Each additional inch in height was found to be correlated with an extra $789/year and not per month as Dave has suggested in the article.

The relationship between an individual's height and pay is more nuanced than it appears. While one may confuse height with good looks, height in fact serves more as a proxy for good health, which results from not only genetic influences, but also from household endowments, such as parents' income and education.  In addition, good health is closely tied with higher labour productivity. Taller individuals could be healthier than the rest that may make them more productive in the labour force, which helps them draw higher wages. And yes, if they look hot, there may be a premium for the looks as well.

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