A study in 2013 drew some buzz because it seemed to suggest that people who read literary fiction were better able to judge and recognize the mental states of other people. Researchers tested people on how many literary fiction authors they knew by showing them lists of real and made-up writers. Picking a real writer earned points and picking a fake one deducted them. Then these people were given a test called the Reading the Mind in the Eyes Test (REMT), which works pretty much exactly how it sounds. Test subjects were shown pictures of peoples' eyes and asked to judge their mental state. Subjects were also tested both before and after reading a short work of literary fiction, sometimes known as high-falutin' fiction.
Researchers at three universities tried to replicate the study results by duplicating the experiment and couldn't. REMT and other "social intelligence" measuring tests showed no statistically significant difference between subjects before and after they took their little trip into the highbrow end of the library.
There are plenty of good reasons to read literary fiction, except when it's pretentious nonsense (Margaret Atwood and Bret Easton Ellis, come on down! You're the next contestants on "What the Hell Did These People Just Write?") Get some insight into the human condition. Prompt reflection on that, and on the important questions of life and existence. Enjoy the work of great wordsmiths. But apparently reading it in order to be a better judge of what other people are feeling isn't one of those reasons. For that, it seems best to rely on the old-fashioned method of talking with them and really listening to what they say.
But not to worry. While there doesn't seem to be any way that reading literary fiction actually makes you smarter, being seen reading it will still often make other people think you're smarter. They'll see it in your eyes.