FEM11090 Assignment 2

Layla Ifzaren (457030), Joost Pracht (456793) and Sophie de Vries Robb (354798)
Introduction
Taller workers seem to earn more than shorter workers on average and the term used to describe this currently widely
recognized phenomenon, is called the height premium. Many empirical studies find evidence for the positive
relationship between height and wage. Heineck (2008), does this for male workers in Germany. Kortt and Leigh (2009),
find that also in Australia the height premium is present. Cinerella and Winter (2009) show a consistent height-wage
premium across Europe using a cross-section of 13 countries. In this short paper we examine if there is evidence for a
height premium using data from the Dutch population. We use the findings of similar papers to search for possible
explanations for our obtained results.
Literature
Previous literature has tried to uncover the causes of the height premium. In our study we aim to take into account
these previous findings in order to uncover the unbiased effect of height on income. Meyer and Selmer (1999), and
later Case and Paxson (2009) find that a higher educational attainment of taller people explains a large part of the
height premium. They also find that taller people practice more high-status professions. This result is supported by
Judge and Cable (2004) whos results show that height is strongly correlated with social interaction-oriented
occupations like jobs in sales and management. As one would intuitively predict, gender is correlated with height as
well as job-status and income, as is shown by Egolf and Corder (1991). Persico et al. (2004) argue that the height
premium can almost be completely explained by the height one had as a teenager through his participation in social
activities at that age. They find that height is no estimator of intelligence whereas Tanner (1996) finds opposing evidence
that amongst children of school age there is a significant though low correlation between height and intelligence. This
correlation diminishes when maturity is reached but does not entirely disappear. Tanners results are supported by
Humphreys et al. (1985) and Case and Paxson (2006) who find that the height premium in the job market can be
explained for a great part by cognitive ability in childhood. Lundborg et al. (2009) find evidence that the height premium
is highly due to the positive correlation between height and physical capacity. Given the results of above mentioned
studies, one could substantiate controlling for a number of variables in order to unveil the true effect of height on
income, namely education, gender, type of occupation, physical capacity and intelligence. Meyer and Selmer (1999) and
Judge and Cable (2004) adjusted for year of birth as well in order to control for the effect of a secular trend in height.
Data and Method
We use data collected by the LISS1 Panel. The LISS panel is a representative sample of the Dutch individuals who
participate in monthly surveys. For our research we use the wave from 2015, containing information about background
variables, work and schooling and income. The dataset contains 6009 observations of which we use 1382 for our
regression. We plan to estimate the effect of height on hourly wage using an OLS regression. We specify different
models which increasingly included a number of covariates. Some control variables used in our regression deserve some
explanation. We included the variable education, which denotes the level of education according to CBS2 categories.
The variable occupation denotes a high-, middle- or low-skill occupation. We defined wage per hour as the gross wage
earned on year basis divided by the number of weeks per year and the hours worked per week. Additionally, we
considered a job contracted with more than 34 hours a full-time job.
Results
Table 1 shows it is evident that there is a sufficient balance between males and females in our data, as well as full-time
and part-time workers. The distribution of educational background is skewed upward whereas most observations of
the level of occupation are concentrated on the middle-category. Only 8 percent of our sample is from western nonDutch origin and only 6 percent is from non-western origin.

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Longitudinal Internet Studies for the Social Sciences

Centraal Bureau voor Statistiek

In table 2 our first regression model shows a significant effect of height on hourly wage at the one percent level whilst
age and gender show themselves to be highly significant as well. However, when control variables for education are
included, the estimate of the effect of height on the hourly wage goes down and its significance decreases toward the
five percent level. Including dummies for high-status and middle-status occupations lowers the estimates size further
to 0.0849. Which would indicate that, keeping other variables constant, one centimeter increase in height increases
hourly wage by 8,5 cents on average. When in the last model we include dummies for western and non-western
immigrants, the size of heights estimate decreases once more and is only significant at a 10% level.
Discussion and conclusion
Our regression estimates show that the height premium can in part be explained by the level of education. The status
of the occupation practiced further lowers the estimate of the height premium. Taller people therefore seem to have a
higher income because they are more educated and sort into higher status occupations. These results are in line with
the findings of Case and Paxson (2009) and Judge and Cable (2004). Therefore, our results do not rule out that the
height premium in the Dutch population might behave similarly to the height premium observed elsewhere. Our
regression models still show a height premium between 6 and 9 eurocents per centimeter after controlling for gender,
age, education and occupation. Based on the results of Case and Paxson (2006) we note that this height premium could
be biased upward due to our lack of data on measures of intelligence, and therefore a lack of inclusion of the
corresponding variable into the regression. The same can be said of measures of physical capacity, which Lundborg et
al. (2009) showed to be one of the underlying causes of the height premium.
We acknowledge that our estimates might suffer from measurement errors. With the calculation made to generate the
variable wage per hour we did not take into account any free days the respondents could have had during the observed
year. This causes deviations in our estimate for wage per hour from the actual wage per hour.
As suggested by Case and Paxson (2009), if indeed taller adults are smarter, employers with incomplete information
about the cognitive ability of their workers might engage in height-based discrimination. This could be another possible
explanation of the remainder of the height premium. However, we think that in order to make any statements about
the possible effect of height discrimination on wages, further research, preferably with a larger sample data, should be
conducted.
Table 1: Summary Statistics
Label (variable)

Mean

SD

Gross wage per hour in euros (hourlywage)

Weekly hours based on contract (hours)
Height in cm (height)
Male (male)
Female (female)
Age (age)
Having a full-time job, hours > 34 (full)
Having a part-time job, hours <= 34 (part)
Lower level of education (educlow)
Middle level of education (educmid)
Higher level of education (educhigh)
Low skill occupation (occuplow)
Middle skill occupation (occupmid)
High skill occupation (occuphigh)
Dutch background (native)
Western immigrant (western)
Nonwestern immigrant (nonwestern)

21.36
33.00
176.09
0.54
0.46
46.04
0.60
0.40
0.15
0.37
0.48
0.16
0.64
0.20
0.86
0.08
0.06

12.05
8.23
10.03
0.50
0.50
11.49
0.49
0.49
0.35
0.48
0.50
0.36
0.48
0.40
0.35
0.27
0.24

Observations

1382

Table 2: OLS regression results, effect of height on hourly wage

height
male
age

(1)
hourlywage
0.128**
(0.0429)
2.684**
(0.861)
0.204***
(0.0283)

(2)
hourlywage
0.128**
(0.0428)
1.925*
(0.961)
0.210***
(0.0284)
1.384
(0.785)

(3)
hourlywage
0.0947*
(0.0408)
2.836**
(0.916)
0.264***
(0.0276)
0.780
(0.747)
3.025**
(0.949)
9.386***
(0.931)

(4)
hourlywage
0.0849*
(0.0397)
2.866**
(0.914)
0.258***
(0.0268)
0.117
(0.729)
1.940*
(0.937)
5.611***
(1.000)
4.143***
(0.904)
10.24***
(1.145)

0.073
35.75

0.075
27.63

0.166
44.70

0.215
46.30

full
educmid
educhigh
occupmid
occuphigh
western
nonwestern
adj. R2
F

(5)
hourlywage
0.0683
(0.0407)
3.028**
(0.918)
0.252***
(0.0271)
0.267
(0.733)
1.922*
(0.936)
5.645***
(1.000)
4.037***
(0.906)
10.17***
(1.145)
-1.569
(1.110)
-1.851
(1.259)
0.216
37.47

N= 1321; Standard errors in parentheses * p < 0.05, ** p < 0.01, *** p < 0.001

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