Older siblings earn more. It's a fact. But why?

Studies have shown that older siblings earn more than those born later. Now, new research claims to have found the reason behind this.

And it is not because parents love their firstborns more. Not just earnings, but older kids seem to be at an advantage in other arenas as well.

Let’s take a closer look.

Are older kids smarter?

In many cultures, children look up to their older siblings. The firstborns are often the favourite of parents, sometimes leading to jealousy among their younger brothers and sisters.

The later-born kids are expected to go to their older brother or sister for advice and navigate the myriad problems of life. While these stereotypes are widely accepted among cultures, research has shown older siblings have an advantage.

Studies claim that the eldest child performs better on cognitive tests than their younger siblings. They also do better in school. But why is this?

A 2016 study published in the Journal of Human Resources said that firstborns have an intellectual edge in academics and are more successful because parents are more invested in them.

Another study says that the disparity in IQ and personality among siblings is extremely small.

Why do older siblings earn more?

A 2011 CareerBuilder survey found older children were more likely to earn six-figure salaries, while the middle children might be in entry-level jobs making $35,000 (about Rs 29 lakh today) or less, reported Fortune magazine.

According to the new paper by the National Bureau of Economic Research (NBER) released in February, this gap in earnings has to do with the frequency of younger kids getting sick as infants.

The data on first and second children born in Denmark between 1981 and 2017 was examined by health economists N Meltem Daysal, Hui Ding, Maya Rossin-Slater and Hannes Schwandt, reported Fortune.

They found that younger siblings had higher chances of ending up at hospitals for respiratory conditions than their older peers, during the first year of their birth.

“In the first year of life, second-born children have two to three times higher likelihoods for being hospitalised for a respiratory condition,” Rossin-Slater, an associate professor in the health policy and economics departments at Stanford University, told Fortune.

She said this is more likely in the first three months of a second child’s life, and “the difference basically disappears after age one”.

The difference was the most when the second child was born in the fall or winter — as respiratory illnesses are more common then. Similar findings were seen when the siblings did not have a large age difference, according to a Business Insider report.

Researchers say this is because older siblings bring germs back home exposing their younger peers.

“We believe that these patterns are explained by the fact that infants with older siblings have more virus exposure — due to their older sibling, who is often in group childcare and ‘brings home’ viruses,” Daysal, an associate professor in the Department of Economics at the University of Copenhagen and an author of the paper, told Business Insider.

Financial impact

The higher risk of sickness in early years leads to less money in later life. The sicker second kids, “when they’re between ages 25 and 32, they have lower incomes. They’re not [less] likely to work, they just earn less in the jobs that they do have,” Rossin-Slater told Fortune.

Researchers studied the incomes of kids born between 1981 and 1989 in Denmark and found younger siblings made 2.4 per cent less on average than their older siblings at the same age.

“Younger siblings with higher virus exposure in infancy have lower earnings as adults. We think that the primary mechanism explaining this result is that severe respiratory illness among very young babies can lead to the impairment of brain development, which, in turn, can affect later mental health,” Daysal was quoted as saying by Business Insider.

She said that sickness outcome explains about 50 per cent of the earnings gap between younger and older siblings.

Older kids may have an advantage

According to a study of Norwegian men published in 2007, the average IQ difference between first- and secondborn children was about three points, which resulted in nearly a two per cent difference in annual earnings.

One reason for this could be that older kids are likely to benefit from helping out their younger siblings in their studies.

“If you’re the firstborn in a big family, you learn through educating your little brothers and sisters. Interestingly, these benefits start to emerge around age 12, when older siblings have more to teach and younger siblings are more ready to learn,” organisational psychologist Adam Grant wrote in his 2023 book Hidden Potential.

He also cited a study of 240,000 Norwegian teenagers – the younger children whose firstborn siblings had died in infancy were found to have higher intelligence scores later in life than those with firstborn siblings.

According to Grant, any advantages that older siblings had were due to “nurture, not nature”, reported Business Insider.

With inputs from agencies