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Beauty and the Worker - Part 1

THE CENTRAL QUESTIONS

Everybody assumes that better-looking people make more money. But why should that be? Is it even true? And if it is true, how much more do they make? Put simply, how much extra does a good-looking worker earn than an average-looking worker? How much less than an average-looking worker does a bad-looking worker make? These sound like simple questions, but they aren't. Because beauty may be related to other characteristics that workers possess, we need to separate out the effects of beauty on income from those of other things that may be related to both beauty and income. Answers to these questions are the most widely available in the burgeoning literature in pulchronomics — the economics of beauty. We have a pretty good feel today for the general sizes of the beauty premium and the ugliness penalty.

Does beauty affect income differently for men and women? Does it affect income differently among older workers than among younger workers? How about by race or ethnicity? While I concentrate on the United States throughout most of this book, one wonders whether the impacts of beauty on incomes differ between the United States and other countries. Is there a special “hang-up” with beauty in the American labor market that produces unusually large effects on incomes compared to elsewhere? How have gains in income that result from one's beauty changed over time? Are we outgrowing a fixation on looks, or does the effect of looks in labor markets loom even larger?

HOW CAN BEAUTY AFFECT EARNINGS?

Imagine a world with only two companies, each with a single boss who makes all the hiring decisions. Call the bosses Cathy and Deb. Their companies make completely different products — they do not compete with each other in what they sell; and each employs half of the workers in this imaginary world. Both Cathy and Deb like to surround themselves with workers whom they view as beautiful. Doing so makes them feel better and enhances their well-being beyond the tremendous profits they will earn from their workers' efforts. All the workers are equally productive — each has the same set of skills, each can help the employer produce as much as any other worker can. All workers work the same number of hours per year. Half the workers are cloned from one parent, Al; the other half are cloned from another parent, Bob. All Al workers look alike, as do all Bob workers; but an Al worker looks different from a Bob worker.

How much will each Al worker be paid? How much will each Bob worker be paid? We know that each Al worker will earn the same as every other Al worker — they are identical in all respects.

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