Affluence isn’t just about education and job choice
Hurry up and wait.
While it’s your education and occupation that best predict income, there’s one factor that does a great job of predicting your salary that many people never consider: your ability to delay gratification. This “delay discounting” better predicts your income than do factors like age, race and ethnicity, according to a Temple University study published this week in the journal Frontiers in Psychology.
To measure their ability to delay gratification, study authors gave participants the choice between getting a smaller sum of money ($500) now, versus a larger sum of money (like $1,000) at a later time (up to a year away). The point was to measure how good participants were at waiting so that they could reap more benefits down the road.
“All sorts of things predict income … Using machine learning, our study was the first to create a validated rank ordering of age, occupation, education, geographic location, gender, race, ethnicity, height, age and delay discounting in income prediction,” said the study’s lead author, Dr William Hampton, who is now at the University of St. Gallen in Switzerland.
Factors that predict income, ranked in order of importance
3. Location (as determined by zip code)
5. Delay discounting
8. Age and race (tied)
The study included 2,500 people who ranged in age from 25 – 65, had incomes from $10,000 and $235,000, education levels from pre-high school to doctorate degree and came from a variety of ethnicities.
In general, the more education you have, the more your are paid, and certain occupations — particularly many jobs in healthcare and technology — are far more lucrative than others. Location matters for income with certain cities tending to pay more than others, and gender, race and ethnicity matter because — in part due to discrimination — in general men are paid more than women and whites paid more than other races.
The reason delay discounting might matter for income is that lower ability to delay instant gratification is correlated with “other undesirable life choices,” the researchers write. Indeed, those who are less able to delay gratification are more likely to use addictive substances like alcohol and opiates, to be pathological gamblers and to have poor psychiatric health and lower intelligence. “One possibility is that delay discounting signals a cascade of negative behaviors that derail individuals from pursuing education and may ultimately preclude entry into certain lucrative occupational niches,” the researchers write.
Another surprising factor that predicts income: how tall you are. The study authors note that taller height might lead to “greater self- and social- esteem, which leads to higher objective and subjective job performance, which in turn leads to improved career success and ultimately higher compensation.”
If you’re a parent reading this — and hoping to maximize your kids’ future income — Dr. Hampton’s got some advice: “If you want your child to grow up to earn a good salary, consider instilling in them the importance of passing on smaller, immediate rewards in favor of larger ones that they have to wait for. This is probably easier said than done, as very few people naturally enjoy waiting, but our results suggest that those who develop the ability to delay gratification are likely investing in their own earning potential.”
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