Spearman’s Law of Diminishing Returns and national ability

•National ability was measured using international standardized tests (e.g., PISA).•National G loadings of tests were lower for higher ability nations.•Spearman’s Law of Diminishing Returns was supported.•Results imply that the predictive validity of tests may be lower for higher ability nations.

This research examined Spearman’s Law of Diminishing Returns (SLODR) using national ability as the unit of analysis. National ability was estimated using international standardized tests such as the Programme for International Student Assessment (PISA), Trends in International Mathematics and Science Study (TIMSS), and Progress in International Reading Literacy Study (PIRLS). Factor analysis estimated the national G loadings of tests for high and low ability nations. Consistent with SLODR, the G loadings of tests were lower for higher ability nations. The pattern was confirmed after correcting for school attendance and age biases. Because a test’s g loading is directly related to its predictive validity (correlation with outcomes), our results imply that the predictive validity of tests may be lower for higher ability nations.