Has Happiness Raised the Impact of Intelligence on Economic Growth?

The existing studies have established that the national average level of intelligence (IQ) is a very strong metric to determine the economic growth across countries. The positive impact of national IQ level towards the... [ view full abstract ]

The existing studies have established that the national average level of intelligence (IQ) is a very strong metric to determine the economic growth across countries. The positive impact of national IQ level towards the productivity of a nation was both direct and robust compared to healthy life expectancy and educational levels. However,a study reported that higher level of life satisfaction or happiness actually reduced the impact of IQ level towards an economic growth. In the present study, we are proposing to reanalyze the interaction between national IQ and happiness towards economic growth throughout the periods of 1970 – 2010 across more than 100 countries (n=108). As part of the analysis, hierarchical multiple regressions are applied, where the results of our moderation analysis revealed that happiness emerged as a significant moderator, where this indicator was found to have reduced the positive impact of national IQ on economic growth at the cross-country level. Statistically, these findings can be supported by the significant (p<0.01) negative interaction term (IQ*X) between IQ and the happiness indicators (X) in the regression analysis, provided the robust t-statistics are considered. Concurring to the previous study, we conclude that higher levels of life satisfaction or happiness actually tend to reduce people’s desire for higher achievement, thereby reducing the impact of IQ on productivity growth. Therefore, based on the present study, we strongly suggest that workplaces should provide their employees with not only happy environment,but also an environment that stimulate the employees to fully utilize their IQ potential to generate higher productivity.