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Myth or Fact? The Beauty Premium across the Wage Distribution

  • Doorley, Karina

    ()

    (LISER (CEPS/INSTEAD))

  • Sierminska, Eva

    ()

    (LISER (CEPS/INSTEAD))

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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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:
Publication status: published in: Economics Letters, 2015, 129 (April), 29–34 (doi:10.1016/j.econlet.2015.01.033)
Handle: RePEc:iza:izadps:dp6674
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  1. Naci Mocan & Erdal Tekin, 2010. "Ugly Criminals," The Review of Economics and Statistics, MIT Press, vol. 92(1), pages 15-30, February.
  2. Mobius, Markus & Rosenblat, Tanya, 2006. "Why Beauty Matters," Scholarly Articles 3043406, Harvard University Department of Economics.
  3. Nicole Fortin & Thomas Lemieux & Sergio Firpo, 2010. "Decomposition Methods in Economics," NBER Working Papers 16045, National Bureau of Economic Research, Inc.
  4. Victor Chernozhukov & Iván Fernández-Val & Blaise Melly, 2012. "Inference on counterfactual distributions," CeMMAP working papers CWP05/12, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
  5. Nicola Persico & Andrew Postlewaite & Dan Silverman, 2003. "The Effect of Adolescent Experience on Labor Market Outcomes: The Case of Height," PIER Working Paper Archive 03-036, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
  6. 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.
  7. 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.
  8. 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).
  9. 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.
  10. Hamermesh, Daniel S. & Meng, Xin & Zhang, Junsen, 2002. "Dress for success--does primping pay?," Labour Economics, Elsevier, vol. 9(3), pages 361-373, July.
  11. 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.
  12. 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.
  13. Foresi, S. & Paracchi, F., 1992. "The Conditional Distribution of Excess Returns: An Empirical Analysis," Working Papers 92-49, C.V. Starr Center for Applied Economics, New York University.
  14. 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.
  15. Mathä, Thomas Y. & Porpiglia, Alessandro & Sierminska, Eva, 2011. "The immigrant/native wealth gap in Germany, Italy and Luxembourg," Working Paper Series 1302, European Central Bank.
  16. Dorothe Bonjour & Michael Gerfin, 1997. "The Unequal Distribution of Unequal Pay - An Empirical Analysis of the Gender Wage Gap in Switzerland," Diskussionsschriften dp9702, Universitaet Bern, Departement Volkswirtschaft.
  17. Michael French, 2002. "Physical appearance and earnings: further evidence," Applied Economics, Taylor & Francis Journals, vol. 34(5), pages 569-572.
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