How well do teen test scores predict adult income?

Now with new figures and notes added at the end — and a new, real life headline and graph illustrating the problem in the middle!

The short answer is, pretty well. But that’s not really the point.

In a previous post I complained about various ways of collapsing data before plotting it. Although this is useful at times, and inevitable to varying degrees, the main danger is the risk of inflating how strong an effect seems. So that’s the point about teen test scores and adult income.

If someone told you that the test scores people get in their late teens were highly correlated with their incomes later in life, you probably wouldn’t be surprised. If I said the correlation was .35, on a scale of 0 to 1, that would seem like a strong relationship. And it is. That’s what I got using the National Longitudinal Survey of Youth. I compared the Armed Forces Qualifying Test scores, taken in 1999, when the respondents were ages 15-19 with their household income in 2011, when they were 27-31.*

Here is the linear fit between between these two measures, with the 95% confidence interval shaded, showing just how confident we can be in this incredibly strong relationship:

afqt-linear

That’s definitely enough for a screaming headline, “How your kids’ test scores tell you whether they will be rich or poor.”

In fact, since I originally wrote this, the Washington Post Wonkblog published a post with the headline, “Here’s how much your high school grades predict your future salary,” with this incredibly tidy graph:

earnings-gpa

No doubt these are strong relationships. My correlation of .35 means AFQT explains 12% of the variation in household income. But take heart, ye parents in the age of uncertainty: 12% of the variation leaves a lot left over. This variable can’t account for how creative your children are, how sociable, how attractive, how driven, how entitled, how connected, or how White they may be. To get a sense of all the other things that matter, here is the same data, with the same regression line, but now with all 5,248 individual points plotted as well (which means we have to rescale the y-axis):

afqt-scatter

Each dot is a person’s life — or two aspects of it, anyway — with the virtually infinite sources of variability that make up the wonder of social existence. All of a sudden that strong relationship doesn’t feel like something you can bank on with any given individual. Yes, there are very few people from the bottom of the test-score distribution who are now in the richest households (those clipped by the survey’s topcode and pegged at 3 on my scale), and hardly anyone from the top of the test-score distribution who is now completely broke.

But I would guess that for most kids a better predictor of future income would be spending an hour interviewing their parents and high school teachers, or spending a day getting to know them as a teenager. But that’s just a guess (and that’s an inefficient way to capture large-scale patterns).

I’m not here to argue about how much various measures matter for future income, or whether there is such a thing as general intelligence, or how heritable it is (my opinion is that a test such as this, at this age, measures what people have learned much more than a disposition toward learning inherent at birth). I just want to give a visual example of how even a very strong relationship in social science usually represents a very messy reality.

Post-publication addendums

1. Prediction intervals

I probably first wrote about this difference between the slope and the variation around the slope two years ago, in a futile argument against the use of second-person headlines such as “Homophobic? Maybe You’re Gay.” Those headlines always try to turn research into personal advice, and are almost always wrong.

Carter Butts, in personal correspondence, offered an explanation that helps make this clear. The “you” type headline presents a situation in which you — the reader — are offered the chance to add yourself to the study. In that case, your outcome (the “new response” in his note) is determined by the both the line and the variation around the line. Carter writes:

the prediction interval for a new response has to take into account not only the (predicted) expectation, but also the (predicted) variation around that expectation. A typical example is attached; I generated simulated data (N=1000) via the indicated formula, and then just regressed y on x. As you’d expect, the confidence bands (red) are quite narrow, but the prediction bands (green) are large – in the true model, they would have a total width of approximately 1, and the estimated model is quite close to that. Your post nicely illustrated that the precision with which we can estimate a mean effect is not equivalent to the variation accounted for by that mean effect; a complementary observation is that the precision with which we can estimate a mean effect is not equivalent to the accuracy with which we can predict a new observation. Nothing deep about that … just the practical points that (1) when people are looking at an interval, they need to be wary of whether it is a confidence interval or a prediction interval; and (2) prediction interval can (and often should be) wide, even if the model is “good” in the sense of being well-estimated.

And here is his figure. “You” are very likely to be between the green lines, but not so likely to be between the red ones.

CarterButtsPredictionInterval

2. Random other variables

I didn’t get into the substantive issues, which are outside my expertise. However, one suggestion I got was interesting: What about happiness? Without endorsing the concept of “life satisfaction” as measured by a single question, I still think this is a nice addition because it underscores the point of wide variation in how this relationship between test scores and income might be experienced.

So here is the same figure, but with the individuals coded according to how they answered the following question in 2008, when they were age 24-28, “All things considered, how satisfied are you with your life as a whole these days? Please give me an answer from 1 to 10, where 1 means extremely dissatisfied and 10 means extremely satisfied.” In the figure, Blue is least satisfied (1-6; 21%), Orange is moderately satisfied (7-8; 46%), and Green is most satisfied (9-10; 32%)

afqt-scatter-satisfied

Even if you squint you probably can’t discern the pattern. Life satisfaction is positively correlated with income at .16, and less so with test scores (.07). Again, significant correlation — not helpful for planning your life.

* I actually used something similar to AFQT: the variable ASVAB, which combines tests of mathematical knowledge, arithmetic reasoning, word knowledge, and paragraph comprehension, and scales them from 0 to 100. For household income, I used a measure of household income relative to the poverty line (adjusted for household size), plus one, and transformed by natural log. I used household income because some good test-takers might marry someone with a high income, or have fewer people in their households — good decisions if your goal is maximizing household income per person.

8 Comments

Filed under Me @ work

8 responses to “How well do teen test scores predict adult income?

  1. These are great graphics to use in a methods class. There really is a positive trend in the data: you can see it in the scatter plot. But the scatter plot also shows what the unexplained variance looks like.

    Like

    • uggen

      Wow — and equally applicable to medical advice based on significant but small associations observed on ginormous samples.,,,

      Like

  2. vijay

    can this post not b summarized in one sentence:

    Rsquared values in sociological studies are low, specially, compared to physical sciences.

    Like

  3. Joshua Block

    Hi Philip!

    Interesting stuff.

    To me, (as an educator and as a citizen,) more important is the correlation between test scores and income along with the general lack of social mobility in the US:
    http://www.nytimes.com/2012/01/05/us/harder-for-americans-to-rise-from-lower-rungs.html?pagewanted=all&_r=0

    Like

  4. Pingback: Pitfalls Of Correlation | CURATIO Magazine

  5. Hector

    The question is: is it the direct effect of the AFQT on incomes or the effect of unmeasured third variables that correlate with both the AFQT and incomes?

    Like

  6. Pingback: Linkluster CSS Alabama | Hit Coffee

  7. Pingback: Linky Thursday | Ordinary Times

Comments welcome (may be moderated)

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s