The Hivemind, Immigration, and IQ

From, A Review of Hive Mind: How Your Nation’s IQ Matters So Much More Than Your Own

From the reviews on Amazon:

The book’s primary and most important contribution is to document the following empirical regularity: Suppose you could a) improve your own IQ by 10 points, or b) improve the IQs of your fellow countrymen (but not your own) by 10 points. Which would do more to increase your income? The answer is (b), and it’s not even close. The latter choice improves your income by about 6 times the former choice.

One implication of the regularity should please some conservatives—perhaps especially Ann Coulter and Donald Trump. It says that, if the U.S. continues its current policy of admitting many third-world immigrants, then this will likely decrease the incomes of current citizens. Alternatively, it also implies that a better policy would be to admit only “the best” people, in the words of Donald Trump.

Regarding the second point, the problem is the immigration debate has been dominated by politics, overshadowing economics. The solution may be to stop or restrict immigration from countries or demographics where there is likely to be a net economic drain.

Hispanics tend to use welfare at a much higher rate than Asians or Europeans (observed for both natives and immigrants):

This lends support to high-IQ immigration. Having a larger pool of labor helps if we consider a situation where a foreigner is qualified and there are no qualified Americans applying, or the foreigner is more qualified, or the foreigner is qualified and can do the work for less.But tech companies in America are still paying top dollar for top US talent. Also, smarter immigrants tend to create jobs.

However, a counterargument is that foreign workers depress wages and take job opportunities that would otherwise go to native tech workers. As I show here, what’s more likely happening is that tech companies are not substituting US workers with foreign workers to save money, as is commonly believed. The report finds that STEM jobs are also hard to fill.

Unfortunately, there isn’t a consensus on the matter, with arguments showing that immigrants may or may not depress wages. A Google search indicates the debate is far from settled.

As for the first point regarding national IQ and income, I’m not so sure about this. Because I have not read the book (and am going by the review), I don’t know if the author makes the distinction between nominal incomes (which are rising) and real (which have been flat for awhile).

Linear regression models show a positive correlation between national IQ and per-capita income, originally observed by Richard Lynn and Tatu Vanhanen in their book, IQ and the Wealth of Nations:

Per-capita income has also soared:

However, real median income has been stagnant despite rising GDP growth:

I think what’s happening here is that per-capita income is skewed in favor the financial ‘elite’, who have seen real wages surge, while the median lags.

Per-capita income is a mean value and does not reflect income distribution. If a country’s income distribution is skewed, a small wealthy class can increase per capita income substantially while the majority of the population has no change in income. In this respect, median income is more useful when measuring of prosperity than per capita income, as it is less influenced by outliers.

Booting the nation’s IQ will likely boost exports, GPD, profits, and technological innovation – but not necessarily real median wages. But that may be OK, though, because new technologies lead to more utility, as in the example I give of TV sets or movie tickets. Technology may improve living standards, so much so that wealth inequality and stagnant wages may not matter. The result, however, may be an ‘un-participatory’ economy where a lot of people are not contributing much to economic growth, nor are participating in the gains such as measured by real wages, in accordance with the Pareto Principle.