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Beauty and the Worker - Part 5

But we can be fairly sure that the effects of beauty on earnings are in the ballpark of the figures in.

These numbers mean little by themselves without comparisons to the effects of other determinants of differences in earnings. How does the 17 percent excess of good-looking men's earnings over those of bad-looking men's (13 percent penalty plus 4 percent premium) compare to the effects of differences in other characteristics on men's earnings? How does the 12 percent shortfall of plain or homely women's earnings from above-average or beautiful women's (4 percent penalty plus 8 percent premium) compare to other effects on women's earnings?

By far the most thoroughly examined determinant of earnings is education. A good estimate for the United States today is that each additional year of schooling raises the earnings of otherwise identical workers by around 10 percent. This effect is a bit more than that of women's good looks; and it implies that men's good looks have an impact on their earnings at least as large as an additional one-and-a-half years of school.

Among the other factors that affect earnings are work experience and whether a workplace is unionized. For a forty-year-old man the impact of good looks on earnings is about the same as that of an additional five years of work experience, and also about the same as that of working in a unionized workplace. The effects of beauty on earnings are not immense, but they are certainly substantial.

When viewed in the context of an entire working life, they seem even larger. In 2010, the average worker earned about $20 per hour. Averaging male and female workers, someone employed 2,000 hours per year over a work life of forty years would earn $1.60 million. But with below-average looks the worker would earn only $1.46 million, while with above- average looks, lifetime earnings would be $1.69 million. A 3 or 4 percent premium for good-looking workers doesn't seem that big; but placed into a lifelong framework, $230,000 extra earnings for being good-looking instead of bad-looking no longer seems small. Comparing the bad-looking to the average-looking worker the effect is smaller — “only” $140,000 over a lifetime — but still quite large. Comparing the average-looking to the above-average looking worker the effect is smaller still — “only” $90,000 over a lifetime — but still substantial.

All of these effects refer to averages: They tell us that a typical good-looking male will earn 4 percent more than the typical average-looking male, and that a typical below-average-looking woman will earn 4 percent less than the typical average-looking woman.

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