Tall men earn more than short men, according to a paper (subscription required) recently published in the Journal of Political Economy, a prominent economics journal. Economists Nicola Persico and Andrew Postlewaite of the University of Pennsylvania and Dan Silverman of the University of Michigan examined the earnings of a large sample of white males in the US and the UK over several decades and found an earnings premium of about 2% for each additional inch of height at adulthood. Put another way, the results suggest that the tallest 25% of the male population earn about 13% more than the shortest 25%, a sizable (no pun intended) difference.
This carefully executed study explicitly rules out a number of potential explanations for the height premium, including employer's preferences for tall workers or the presence of unobservable, omitted factors correlated with height that might drive the results. Interestingly, the factor that best explained the height premium among adult males was the individual's height at age 16. Tall adult males earn more than short adult males because they also tended to be tall in adolescence. Height at age 11 and 7 had no effect on wages, further pinpointing the age at which height begins to matter for males.
What does this have to do with sports - other than helping to explain why centers earn more than small forwards in the NBA? The existence of a height premium in the labor market raises a number of interesting questions. For starters, what mechanism during adolescence might cause a height premium in adulthood? The results in this paper suggest that participation in sports prior to reaching adulthood plays an important, but not yet understood, role in the height premium. This underscores why economists should pay more attention to sports participation, especially in adolescents. To date, relatively little economic research has focused on the determinants of sports participation. The results in this paper also provide a justification for public subsidies for youth sports, as the height premium implies a corresponding increase in adult male productivity that benefits all of society.
The study also performs a cost-benefit analysis of the lifetime value of a six year childhood course of the human growth hormone somatropin to stimulate growth. The $135,000 cost of this treatment would be worth it (ignoring the nonmonetary costs associated with the daily injections it would require - ouch!) in present discounted value terms, assuming that the parents had access to that amount of money. I doubt that credit markets are efficient enough to generate such a loan, even if any parent was crazy enough to try and get one, but that's not the point of this back-of-the-envelope calculation.
The study neglects a second, potentially more important implication of the height premium. The authors find evidence of a height premium for males but not for females. Many intercollegiate athletic departments in the US comply with the requirements of Title IX by cutting men's sports teams and reducing opportunities for males to participate in intercollegiate athletics, rather than by adding women's sports and increasing the opportunities for females. If the mechanism that leads to the height premium works through age 22 or so, then cuts made to men's sports teams in order to comply with Title IX may have a previously overlooked economic implication. Denying males an opportunity to participate in intercollegiate athletics could reduce their lifetime earnings because of a reduction in the height premium. The unintended consequences of Title IX may be larger than previously imagined.