The most common explanation is "resource dilution:"  the oldest usually gets the most parental resources. In any given day, the oldest receives more attention than any of the sibs.  The more attention you receive, the more you develop.  The attention (more reading, more activities, more conversation) is supposed to give the oldest kid the emotional resources to grow.

That's fine, but it doesn't explain why only-children aren't the smartest, for example.  (Common answer: the parents of an only child didn't want more children because it took time away from themselves; so the only-child actually receives "less" attention than other kids in other families.  Maybe, but it can't be true for all such families. (Can it?))

But I favor a different explanation.

First, oldest kids get parentified: "go watch your brother and sister!" "Make sure this baby doesn't roll!"  "Look, I know you're only five, but I can't get up right now, do me a favor and go into the kitchen, get out the lasagna pan, set the upper oven to 450, chop up the garlic and I'll be there in a minute."  Oldest kids may not be smarter, they may just have had to grow up faster; they have to learn to think fast, improvise, etc.  This might explain USA TODAY's survey of CEOs: 50% were first born, while 20% were last born.  

But second, there's this: "you idiot! you chopped the garlic with a steak knife!?"  

You learn fast, lessons your younger sibs don't learn as early in life.  And, specifically, you learn a) what adults "do" (because you're often expected to replicate it); b) that you are always under  scrutiny-- so perform, don't bother trying to hide; c) that you are under more scrutiny than your sibs-- in other words, that they are "special."  Not better, but singled out for more responsibility, more scrutiny than others.  For some reason, you are different.

Here's something interesting: more than likely, you are attempting to frame this post in terms of your own childhood. Were you the oldest, youngest, what happened, etc.  Why doesn't it occur to you to frame it in terms of your own children? 

If you're a parent of more than two kids, ask yourself the following: who do you yell at the most?  Would you trust your youngest today to do things you trusted your oldest to do at that same age (e.g. watch a  baby?)  When you need a kid to do something for you, who do you ask?

I know you'll have "reasons" why you pick the first, but the important part is that for whatever reason, you are picking the oldest. 

Identity comes easier to the oldest born, because it is reinforced (positively or negatively). "You know better, "you're supposed to," etc.  It's pretty easy to see how narcissists are almost always the oldest child.  (And borderlines the youngest, or only.) 

Depending on why they get more scrutiny and more responsibility, they develop differently.   

Maybe by the time the parents get to the third kid they're too tired to uphold the same level of performance-- so it is that the youngest seems to get away with more; maybe the parents realize they were too tough with the first.  In this case, it's too late for the oldest, but the benefit to the younger ones is greater. Maybe they thus get more positive attention and less punishment or control.  So maybe they become artistic, or pick a career that's unusual.

But sometimes a relational pattern is established, like dating the same kind of guy over and over.  A pattern develops, where the oldest "never does anything right" (because he's expected to do what would never have been expected of the youngest)  and parents are repetitively in an emotional state of anger or frustration.  Soon, that's how they relate to each other; the oldest on the defensive, or trying to perform, the parents on full alert, ready to go insane.  Even when the kid grows up and stops making such "stupid mistakes," the pattern is already firm: the parents relate to him by leves of anger and frustration.

The result in this situation is that the oldest goes on to succeed-- amazed, really, at how easy the world is and how little is actually expected of or necessary from him, in comparison to what went on at home-- but is simultaneously bitter, resentful of how easy it is for other people to be happy when they want to be, despite their lack of successes.  These people can easily become abusers (especially emotionally) ("I hate your emotions!"); they can become alcoholics ("I hate my emotions!"); insomniacs ("I hate that another day has passed and I have done nothing of actual consequence, nothing, nothing, nothing.")

(For more on prenting/developmental issues, search the site for "parenting.")