Assessing the IQ-earnings link in environmental lead impacts on children: have hazard effects been overstated?

Studies in the 1990s by Schwartz and by Salkever provided the bases for measuring the earnings impacts of IQ decrements due to lead exposure for children, and many subsequent regulatory, policy guidance, and academic analyses adopted the estimates from these studies. Results by Salkever implied somewhat greater impacts of IQ decrements, but have been contested, in a series of more recent critical review articles, as overestimates of the negative impacts on children׳s future earnings caused by IQ decrements due to lead exposure. This paper examines the contentions of proponents of this overstatement hypothesis, the applicability of the evidence they offer, and the results from an additional important study from 1998 heretofore overlooked in the literature. Results of this examination indicate that the evidence for the overstatement hypothesis is seriously flawed. Studies cited to support this hypothesis (1) often report only evidence on wage impacts and thus ignore IQ impacts on hours of work and work participation rates, (2) give lesser weight to or completely exclude population groups that show relatively higher IQ impacts (e.g., women), and (3) give substantial weight to pre-1980 wage and earning data, thereby omitting the influence of recent upward trends in skill differentials in earnings and increasing returns to education. Because of these and other deficiencies, available evidence does not substantiate the overstatement hypothesis. In contrast, recent evidence overlooked by the proponents of this hypothesis suggests that the results reported by Salkever understate the actual strength of the negative IQ impacts from lead exposure.