The association between height and earnings may be driven by the influence of early life health and nutrition on adult height, educational attainment, and occupational choice.
In Making Sense of the Labor Market Height Premium: Evidence From the British Household Panel Survey (NBER Working Paper No. 14007), authors Anne Case, Christina Paxson, and Mahnaz Islam use nine waves of the British Household Panel Survey (BHPS) to investigate the large labor market height premium observed in the data, where each inch of height is associated with a 1.5 percent increase in wages, for both men and women. They find that half of the height premium can be explained by the association between height and educational attainment among BHPS participants. Of the remaining premium, half can be explained by taller individuals selecting into higher status occupations and industries. These effects are consistent with the authors' earlier findings that taller individuals on average have greater cognitive function, which manifests in greater educational attainment, and better labor market opportunities.
The authors point out that their results differ from those of other researchers - who did not find simple linear height-wage premiums for tall workers -- even though they used the same data source. The differences arise in part because of the BHPS samples chosen for analysis: Case and her co-authors use all data available in nine waves, Wave 7 (1997) to Wave 15 (2005), while the previous research used data from Wave 14 only. In addition, the earlier research divided workers by sex into nine occupational categories within that one BHPS wave, which led to a very small sample to study. Case and her co-authors also note that the height premium may be masked by looking within occupation if, as is apparent in the data, taller people sort into better paid occupations.
The findings in the NBER paper suggest that the association between height and earnings may be driven by the influence of early life health and nutrition on adult height, educational attainment, and occupational choice.
-- Lester Picker