Is There Really a Beauty Premium or an Ugliness Penalty on Earnings?

Original Paper

Abstract

Purpose

Economists have widely documented the “beauty premium” and “ugliness penalty” on earnings. Explanations based on employer and client discrimination would predict a monotonic association between physical attractiveness and earnings; explanations based on occupational self-selection would explain the beauty premium as a function of workers’ occupations; and explanations based on individual differences would predict that the beauty premium would disappear once appropriate individual differences are controlled. In this paper, we empirically tested the three competing hypotheses about the “beauty premium”.

Design/Methodology/Approach

We analyzed a nationally representative and prospectively longitudinal sample from the National Longitudinal Survey of Adolescent Health (Add Health).

Findings

The results contradicted the discrimination and self-selection explanations and strongly supported the individual differences explanation. Very unattractive respondents always earned significantly more than unattractive respondents, sometimes more than average-looking or attractive respondents. Multiple regression analyses showed that there was very weak evidence for the beauty premium, and it disappeared completely once individual differences, such as health, intelligence, and Big Five personality factors, were statistically controlled.

Implications

Past findings of beauty premium and ugliness penalty may possibly be due to the fact that: 1) “very unattractive” and “unattractive” categories are usually collapsed into “below average” category; and 2) health, intelligence (as opposed to education) and Big Five personality factors are not controlled. It appears that more beautiful workers earn more, not because they are beautiful, but because they are healthier, more intelligent, and have better (more Conscientious and Extraverted, and less Neurotic) personality.

Originality/Value

This is the first study to show that: 1) very unattractive workers have extremely high earnings and earn more than physically more attractive workers, suggesting evidence for the potential ugliness premium; and 2) the apparent beauty premium and ugliness penalty may be a function of unmeasured traits correlated with physical attractiveness, such as health, intelligence, and personality.

Keywords

Physical attractiveness Earnings Discrimination Occupational self-selection Individual differences Productivity 

Notes

Acknowledgements

We thank Tomas Chamorro-Premuzic, Tatyana Deryugina, Jason M. Fletcher, Adrian Furnham, Daniel S. Hamermesh, Andrew J. Oswald, Arthur Sakamoto, David Strang, Felix Thoemmes, two anonymous reviewers, and Associate Editor Eric D. Heggestad for their comments on earlier drafts. See Add Health acknowledgments at http://www.cpc.unc.edu/projects/addhealth/faqs/addhealth/index.html#what-acknowledgment-should-be.

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Copyright information

© Springer Science+Business Media New York 2017

Authors and Affiliations

  1. 1.Managerial Economics and Strategy Group, Department of ManagementLondon School of Economics and Political ScienceLondonUK
  2. 2.Department of ManagementUniversity of Massachusetts—BosonBostonUSA

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