Research shows that education is linked to higher life satisfaction, but it is still unclear as to why. New research published in PLOS One found that higher numeric intelligence was associated with higher income level, which was then associated with more satisfaction with one’s life and income.
“Classic economic theory suggests that intelligence (‘reason’) produces better decisions, more wealth, and higher levels of ‘joy’ and life satisfaction. Conventional wisdom informs us that the opposite can be true – ‘ignorance is bliss.’ That is, being smart comes with a price, and that price is reduced life satisfaction,” explain study authors Pär Bjälkebring and Ellen Peters.
There is research to support both these theories of how intelligence relates to life satisfaction. Specifically, research suggests numeric intelligence (i.e., the ability to understand and use mathematical concepts) might be particularly important in relation to one’s life satisfaction.
“Numeric intelligence is potentially important because numbers instruct, inform, and give meaning to information intended to improve everyday judgments and choices, and those with greater numeracy generally understand more numeric information and make superior judgments and choices when numbers are involved,” reasoned the study authors.
Further, people who are highly numerate (i.e., high in numeric intelligence) tend to have higher incomes and are less likely to be unemployed long-term regardless of education and other cognitive abilities. Income is important for life satisfaction in that more income typically leads to more life satisfaction. However, it is important to note that people do not judge happiness on absolute income, but on relative income to others.
The researchers used data from surveys conducted by the Understanding America Study (UAS) housed at the University of Southern California (USC). Participation took place online. Data collection began in 2014 and complete data from up until April 26, 2018, were used for this analysis for a final sample of 5,525 U.S.-based adults.
Participants gave demographic information such as age, gender, education, and income level. They also completed measures of objective numeracy (i.e., numeric intelligence) and verbal intelligence. They also completed a Big-Five (e.g., Extraversion, Agreeableness, Conscientiousness, Neuroticism, and Openness) personality measure to assess their levels of each of these traits. Lastly, participants indicated how much they were satisfied with their income and how much they were satisfied with their life.
Results show that people who were more numerate had higher income, more education, and greater verbal intelligence. Numeracy was also related to greater income satisfaction and greater life satisfaction. The best indicators of income were education level, numeric intelligence, and verbal intelligence. These variables accounted for 25% of the variance in income while the Big-Five personality traits accounted for only 3.4%. To illustrate the impact of numeracy, the researchers note that the difference in income between those lowest and highest on the numeracy scale was around $36,000/year regardless of education, verbal intelligence, age, gender, or personality traits.
Further analysis showed that numeracy relates to both higher income satisfaction and higher life satisfaction via income level. Put other way, the results suggest that it is through having more income that numeracy can improve income and life satisfaction. More analysis showed that at lower income levels high numeracy was associated with lower income satisfaction and lower life satisfaction. Further, income level had little effect on satisfaction in those lower in numeracy.
“To sum up, our data suggest that objective numeracy had an indirect effect on life evaluations through income, and it moderated the relation of income for both satisfaction variables. These data support our supposition that those higher and lower in objective numeracy used income differently to evaluate their lives, irrespective of their level of education or verbal intelligence,” concluded the authors.
The researchers cite some limitations to this work including the correlational nature of these data, which makes it inappropriate to make any claims about whether numeracy causes changes income or in income/life satisfaction.
The study, “Money matters especially if you are good at math Numeracy, verbal intelligence, education, and income in satisfaction judgments“, was published November 24, 2021.