In this paper, we offer a simpler explanation: Taller people earn more on average, because they are smarter on average. As early as age 3, before schooling has had a chance to play a role, taller children perform significantly better on tests of verbal ability. Indeed, throughout childhood, taller children outperform others on standardized tests. Tall children are significantly more likely to become tall adults, and as adults they are more likely to select into higher paying occupations that require more advanced verbal and numerical skills and greater intelligence, for which they earn handsome returns.This table of the strength and intelligence needed for various occupations and for the two sexes is also quite useful. The data is from the US National Health Interview Survey.
Stature and status: Height, ability, and labor market outcomes
Anne Case and Christina Paxson
Center for Health and Wellbeing