Beauty and the Labor Market
We develop a theory of sorting across occupations based on looks and derive its implications for testing for the source of earnings differentials related to looks. These differentials are examined using the 1977 Quality of Employment, the 1971 Quality of American Life, and the 1981 Canadian Quality of Life surveys, all of which contain interviewers' ratings of the respondents' physical appearance. Holding constant demographic and labor-market characteristics, plain people earn less than people of average looks, who earn less than the good-looking. The penalty for plainness is 5 to 10 percent, slightly larger than the premium for beauty. The effects are slightly larger for men than women; but unattractive women are less likely than others to participate in the labor force and are more likely to be married to men with unexpectedly low human capital. Better-looking people sort into occupations where beauty is likely to be more productive; but the impact of individuals' looks on their earnings is mostly independent of occupation.
American Economic Review, vol 84, Dec. 1994, pp 1174-1194 citation courtesy of