Part 1 of this blog series focused on the measurement of beauty in surveys. Having that variable up and running now allows us to get to the essential question of beauty and earnings. I will first discuss the available data. Secondly, I will discuss why women are seemingly less affected by bad looks than men. Next, I will discuss whether beautiful people earn more because of unobserved productivity or discrimination.
Not controlling for any other variables, on average, 4s and 5s (measured 1-5) earn 3% more than 3s. Women rated 2 and 1 earn 3% less than 3s, while males rated 1-2 earn a shocking 22% less than 3s. These numbers might be highly confounded (influenced by other factors related to beauty and earnings). I will name some variables which might make the crude finding spurious. It might be that better-looking people have more education and thus education explains the beauty effect rather than beauty itself. We know from the previous blog that age and beauty are related. What if old people, perceived as worse-looking, are getting penalized in the labor market. Health might be another factor influencing both beauty and earnings. The family background might be a confounding variable. If your parents are wealthy you could spend more on your looks and job search, thus beauty not being the causal factor for increased earnings, but family income.
Controlling for all of these variables we still see a statistically significant effect for beauty on earnings. Compared to 3s, female 4s and 5s earn 8% more, while 1s and 2s earn 4% less. For males, the bonus is 4% (not statistically significant), while the punishment is 13%. In general, one can observe that controlling for the variables mentioned above decreases the effect of beauty on earnings (except for the premium for women (possibly due to the “bimbo effect”: beautiful women on top levels earning more because of their beauty and less because of their great credentials)). The striking difference between the punishment of ugly males and females persists. Next, I will present a theory as to why this might be possible.
After controlling for numerous variables ugly males earn 13% less than average males while ugly women earn only 4% less than average women. How can this be? To me, this was completely counter-intuitive. If I think of ugly men I think of Harvey Weinstein. If I think of ugly women (I am sorry to say) I think of women working in the lowest end of the service industry. To me, it was clear that men have to endure less of a penalty for being ugly than women. And I still believe this is the case.
Measuring the beauty effect of people in the labor market excludes a very important group of people: People not in the labor market. We do not have any records of what people would earn if they were in the labor market. A theory predicts that ugly women get punished way harsher than ugly men. This harsh punishment leads to ugly women dropping out of the labor market and instead having children, earning child benefits, in order not to endure the huge punishment of looks on female earning. This means that the labor market is not a representative sample to conclude the beauty effect. It is theorized that ugly women have the possibility and incentive to drop out of the labor market, thus not showing up in the statistics. It is thus probable that ugly women must endure a higher penalty than men, but because of it, they are not represented in the data.
If we think all of this might be troubling, we might also think about the origin of this beauty effect on earnings. Is it that beautiful people are more productive or is it that society (producers and consumers) just prefers to buy from and hire good-looking people? It is imaginable that beautiful people are more productive. They probably have more confidence, are less shy to attract attention, and can thus act more productively in a lot of job settings. It is also conceivable that beautiful people are not at all more productive: that they spend time socializing and doing sports rather than working (which ugly people might prefer over the former). We just don’t know. There are some lab experiments and papers on this topic but no clear evidence on whether its productivity or discrimination. In Corona times it is not unfathomable to think of a natural experiment. What if Corona makes your skin have immense acne for the rest of your life, but otherwise you should be the same person as before. If one sees a difference in wages from this point onwards for people who randomly got “corona-acne” one could single out discrimination as the favorite explanation. If on the other hand, nothing changes, then we must assume that the beauty of a person up to the “corona-acne” leads to more productive behavior, that the person can continue to enjoy, with extra earnings.
This again is just an overview of how beauty affects the labor market. Many more questions and puzzles are presented and solved in Hamermesh’s book “Beauty Pays”. To mention some of them: Who discriminates: The producer or the consumer? What about legal protection for the ugly? Should we introduce ugly people benefits? Which occupations are most effected by beauty discrimination (maybe prostitution)? And which are the least affected?
Next up we will discuss Beauty and the Social Market.
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