Myth or Fact? The Beauty Premium across the Wage Distribution
AbstractWe apply an innovative technique to allow for differential effects of physical appearance and self-confidence across the wage distribution, as traditional methods can confound opposing effects at either end of the wage distribution. Comparing the effects of beauty and confidence measures in two countries (Germany and Luxembourg), we find that wages are more driven by looks than self-esteem. Counterfactual wage distributions, constructed using distribution regression, show a beauty premium for women at the bottom of the wage distribution. However, most of this is explained by the fact that attractive women have better labor market attributes than their unattractive counterparts. We find a large wage premium for attractive men throughout the wage distribution which is largely unexplained by labor market attributes. There is a small wage penalty for self-confident individuals, particularly men, although their labor market characteristics are generally better than their less confident counterparts. We show that the difference in characteristics between beautiful and plain people contributes to the beauty premium identified using traditional models, particularly for women. Isolating the characteristic effect from the unexplained effect of beauty on wages leads to smaller beauty premium for women.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6674.
Length: 37 pages
Date of creation: Jun 2012
Date of revision:
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Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
Find related papers by JEL classification:
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
- J70 - Labor and Demographic Economics - - Labor Discrimination - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-07-14 (All new papers)
- NEP-LAB-2012-07-14 (Labour Economics)
- NEP-LMA-2012-07-14 (Labor Markets - Supply, Demand, & Wages)
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