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Myth or Fact? The Beauty Premium across the Wage Distribution

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  • Doorley, Karina

    ()
    (IZA)

  • Sierminska, Eva

    ()
    (CEPS/INSTEAD)

Abstract

We 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 Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6674.

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Length: 37 pages
Date of creation: Jun 2012
Date of revision:
Handle: RePEc:iza:izadps:dp6674

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Keywords: wages; distribution; physical appearance; discrimination;

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References

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  1. Thomas Y. Mathä & Alessandro Porpiglia & Eva Sierminska, 2011. "The Immigrant/Native Wealth Gap in Germany, Italy and Luxembourg," BCL working papers 57, Central Bank of Luxembourg.
  2. López Bóo, Florencia & Rossi, Martín A. & Urzua, Sergio, 2012. "The Labor Market Return to an Attractive Face: Evidence from a Field Experiment," IZA Discussion Papers 6356, Institute for the Study of Labor (IZA).
  3. Naci Mocan & Erdal Tekin, 2010. "Ugly Criminals," The Review of Economics and Statistics, MIT Press, vol. 92(1), pages 15-30, February.
  4. Jeff E. Biddle & Daniel S. Hamermesh, 1995. "Beauty, Productivity and Discrimination: Lawyers' Looks and Lucre," NBER Working Papers 5366, National Bureau of Economic Research, Inc.
  5. Nicola Persico & Andrew Postlewaite & Dan Silverman, 2004. "The Effect of Adolescent Experience on Labor Market Outcomes: The Case of Height," NBER Working Papers 10522, National Bureau of Economic Research, Inc.
  6. Mobius, Markus & Rosenblat, Tanya, 2006. "Why Beauty Matters," Scholarly Articles 3043406, Harvard University Department of Economics.
  7. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
  8. Derek A. Neal & William R. Johnson, 1995. "The Role of Pre-Market Factors in Black-White Wage Differences," NBER Working Papers 5124, National Bureau of Economic Research, Inc.
  9. Daniel S. Hamermesh & Xin Meng & Junsen Zhang, 1999. "Dress for Success — Does Primping Pay?," NBER Working Papers 7167, National Bureau of Economic Research, Inc.
  10. Nicola Persico & Andrew Postlewaite & Dan Silverman, 2001. "The Effect of Adolescent Experience on Labor Market Outcomes: The Case of Height, Third Version," PIER Working Paper Archive 04-013, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania, revised 05 Jan 2004.
  11. Victor Chernozhukov & Iván Fernández-Val & Blaise Melly, 2012. "Inference on counterfactual distributions," CeMMAP working papers, Centre for Microdata Methods and Practice, Institute for Fiscal Studies CWP05/12, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
  12. Foresi, S. & Paracchi, F., 1992. "The Conditional Distribution of Excess Returns: An Empirical Analysis," Working Papers, C.V. Starr Center for Applied Economics, New York University 92-49, C.V. Starr Center for Applied Economics, New York University.
  13. Dorothe Bonjour & Michael Gerfin, 2001. "The unequal distribution of unequal pay - An empirical analysis of the gender wage gap in Switzerland," Empirical Economics, Springer, vol. 26(2), pages 407-427.
  14. Michael French, 2002. "Physical appearance and earnings: further evidence," Applied Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 34(5), pages 569-572.
  15. Nicole Fortin & Thomas Lemieux & Sergio Firpo, 2010. "Decomposition Methods in Economics," NBER Working Papers 16045, National Bureau of Economic Research, Inc.
  16. DOORLEY Karina & SIERMINSKA Eva, 2011. "Beauty and the beast in the labor market: Evidence from a distribution regression approach," CEPS/INSTEAD Working Paper Series 2011-62, CEPS/INSTEAD.
  17. Anindya Sen & Marcel-Cristian Voia & Frances R. Woolley, 2010. "Hot or Not: How Appearance Affects Earnings and Productivity in Academia," Carleton Economic Papers 10-07, Carleton University, Department of Economics.
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  1. Rob Lowe & the left's dilemma
    by chris dillow in Stumbling and Mumbling on 2014-04-09 12:59:16

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