Older or younger children: researchers found out who makes more money and why

Researchers have found that an older child tends to earn more money and perform better on cognitive tests than younger ones. However, experts disagreed on what factors are the main drivers of this trend.

SSPDaily tells about it.

In an updated working paper published in February by the National Bureau of Economic Research, the authors found that one of the key factors is the restraint of younger children as they are more likely to get sick in childhood.

After examining data on first and second siblings born in Denmark between 1981 and 2017, the researchers found that younger siblings were three times more likely than their older ones to be hospitalized for respiratory illnesses during their first year of life. The difference was the greatest when the second child was born in the fall or winter - when respiratory illnesses are more common - and when siblings were closer in age.

Moreover, being susceptible to illness can have long-term financial consequences. When researchers studied the earnings of children born between 1981 and 1989 in Denmark, they found that younger siblings earned an average of 2.4% less than their older siblings at the same age.

"Younger siblings with a higher risk of contracting the virus in childhood have lower earnings as adults," Meltem Daysal, an associate professor at the University of Copenhagen's Department of Economics and author of the paper, said. "We believe that the main mechanism explaining this result is that severe respiratory illness in very young children can lead to impaired brain development, which in turn can affect mental health later in life."

Daysal added that younger siblings who lived in areas with higher rates of childhood respiratory illness were more likely to use mental health resources at a young age.

She said their study found that inequalities in early life health outcomes explained approximately 50% of the income difference between younger and older siblings.

Other reasons why firstborns may have an advantage

Daysal said that studies in different countries and contexts have supported the idea that older siblings tend to have more education and economic success than their younger ones. For example, a study of Norwegian men published in 2007 found that the average difference in IQ between firstborns and other children is about 3 points, and this translates into a difference in annual income of about 2%.

A 2011 survey of U.S. adults by Career Builder found that the firstborn is more likely to earn a six-figure salary.

"Firstborns do better in school and earn better," Sandra Black, a Columbia University economics professor who has conducted research on the issue, told Marketplace in 2018. "And we also see that there is a downward trend depending on birth order. Thus, the second child is slightly worse off than the first child, and the third child is even worse off."

A number of researchers have refuted some of the findings. For example, a 2015 study found that differences in IQ and personality between siblings were extremely small.

The higher likelihood of respiratory illnesses in infants among younger siblings is not the only explanation for the difference in results that experts offer.

First, it is possible that parents invest less in raising children after the birth of their first child, and this may have negative consequences in the future.

A 2017 study of Swedish men found that, compared to firstborns, siblings born later spent almost an hour less per week on homework, read books much less often, and spent much more time watching TV or playing on the computer. Parents also reported spending less time discussing schoolwork with their late-born children.

"We believe that these results suggest that parents invest less in their later-born children, such as being less strict with them and providing less parental supervision," the study authors write.

Another explanation is that firstborns benefit from helping their younger siblings.

In organizational psychologist Adam Grant's book Hidden Potential, published in 2023, he cites a study that found that children without siblings tend to perform worse on cognitive tests than firstborns with younger siblings. He said this may be partly due to the "tutor effect."

"If you're the firstborn in a large family, you learn by raising your younger siblings," Grant wrote. "Interestingly, these benefits begin to show up around age 12 when older siblings have more to teach and younger siblings are more ready to learn."

Some researchers have found that biological differences between siblings do not explain the difference in outcomes. Grant cited a study of 240,000 Norwegian adolescents that showed that younger siblings whose firstborn died in infancy had higher intelligence scores than children born later but who had firstborns. According to him, this indicates that any advantages of firstborns are due to upbringing, not nature.

As a reminder, scientists have found that education extends life expectancy regardless of age, gender, location, social and demographic background. The researchers analyzed data from 59 countries.