Research across a number of disciplines has highlighted the role of early life health and circumstance in determining health and economic outcomes at older ages. Nutrition in utero and in infancy may set the stage for the chronic disease burden that an individual will face in middle age (David J. Barker, 1998; Barker et al. 1989; Johann Eriksson et al. 2001). Childhood health may also have significant effects on economic outcomes in adulthood. Collectively, a set of childhood health measures can account for a large fraction of the explained variance in employment and social status observed among a British cohort followed from birth into adulthood (Anne Case, Angela Fertig and Christina Paxson 2005).

The well-known association between height and earnings is often thought to reflect factors such as self esteem, social dominance, and discrimination. We offer a simpler explanation: height is positively associated with cognitive ability, which is rewarded in the labor market. Using data from the US and the UK, we show that taller children have higher average cognitive test scores, and that these test scores explain a large portion of the height premium in earnings. Children who have higher test scores also experience earlier adolescent growth spurts, so that height in adolescence serves as a marker of cognitive ability.