Oldest Siblings Make More Money Than Younger Siblings. Researchers Have a New Theory About Why.

Estimated read time 5 min read
  • An NBER working paper found older siblings tended to make more money than their younger siblings. 
  • Higher hospitalization rates among younger siblings could affect their future earnings.
  • Prior research has documented a similar trend in siblings’ earnings and outcomes.

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For years, researchers have found that the eldest child tends to earn more money and perform better on cognitive tests than their younger siblings. However, experts have disagreed on which factors are the biggest drivers of this trend.

In an updated working paper published in February by the National Bureau of Economic Research, the authors found that one key factor was holding back younger siblings: They were more likely to get sick as infants.

After examining data on first- and secondborn siblings born in Denmark between 1981 and 2017, the researchers found that younger siblings were two to three times as likely as their older siblings to be hospitalized for respiratory conditions during the first year of their lives. The disparity was the largest when the secondborn child was born in the fall or winter — when respiratory illnesses are more common — and when the siblings were closer in age.

“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,” N. Meltem Daysal, an associate professor in the Department of Economics at the University of Copenhagen and an author of the paper, told Business Insider via email.

What’s more, exposure to illnesses may have long-term financial impacts. When the researchers looked at the earnings of children born between 1981 and 1989 in Denmark, they found that among employed siblings, younger siblings earned 2.4% less on average than their older siblings at the same age, Daysal said.

“Younger siblings with higher virus exposure in infancy have lower earnings as adults,” Daysal said of the paper’s findings. “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 added that younger siblings who lived in areas with higher rates of infant respiratory illness were more likely to use mental-health resources in young adulthood.

She said their research found the disparity in early health outcomes explained roughly 50% of the earnings gap between younger and older siblings.

Other reasons firstborn siblings might have an advantage

Daysal told BI that studies across various countries and contexts corroborated the idea that older siblings tend to have more education and economic success than their younger siblings.

For example, a study of Norwegian men published in 2007 found that the average difference in IQ between first- and secondborn children was about 3 points — and that this translated to a roughly 2% difference in annual earnings. A Career Builder survey of US adults from 2011 found that the firstborn child was the most likely to have a six-figure salary.

“Firstborn children do better on education, on earnings,” Sandra Black, an economics professor at Columbia University who’s conducted research on the subject, told Marketplace in 2018. “And what we see also is that there is a declining pattern by birth order. So secondborn does a little bit worse than the firstborn, the thirdborn does a little bit worse.”

Some researchers have pushed back on certain findings. A 2015 paper, for instance, found that the differences in IQ and personality among siblings were extremely small.

A higher likelihood of respiratory illness as infants among younger siblings is far from the only explanation experts have raised for the disparity in outcomes.

First, it’s possible that parents become less invested in raising children after their firstborn — and that this can have negative implications down the road.

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

“We think these results suggest that parents invest less in later borns; e.g. being less strict and providing less parental supervision,” the authors wrote.

Another explanation: Firstborns benefit from helping out their younger siblings.

In the organizational psychologist Adam Grant’s book “Hidden Potential,” published in 2023, he cited research that found only children — with no siblings — tended to perform worse on cognitive tests than firstborns with younger siblings. He said this could be partially due to a “tutor effect.”

“If you’re the firstborn in a big family, you learn through educating your little brothers and sisters,” Grant wrote. “Interestingly, these benefits start to emerge 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 don’t explain the disparity in outcomes.

Grant cited a study of 240,000 Norwegian teenagers that found younger siblings who had firstborn siblings who died in infancy went on to have higher intelligence scores than later-born kids with firstborn siblings. He said this suggested that any firstborn advantages were due to nurture, not nature.

“We can rule out biological and prenatal causes,” he wrote.