The Market for Beauty

We all want things to be beautiful. On an individual level, this might mean applying make-up or buying nice clothes. Mother Nature herself seems to have a favourite golden ratio to make the natural world aesthetically pleasing. And for an employer, this might mean hiring as many beautiful people as possible.

It’s well documented that beautiful people are more likely to be hired.[1] Employees at the same firm may earn over 10% more if they are perceived to be above average in attractiveness.[2] Economists have described this as the ‘beauty premium’, or conversely, the ‘ugliness penalty’.[3] While other arguably more contemptible forms of labour discrimination exist, the existence of the beauty premium has piqued the curiosity of economists.

Some argue that the beauty premium is merely a consequence of selection bias. Beautiful people tend to be more confident, and as such, may come across as more employable on average.[4] Other researchers have found that employers may not consciously discriminate, but rather incorrectly perceive attractive people as more competent.[5] Another study suggested that the existence of the beauty premium is context dependent – it arises in professions where beauty is perceived to be influential. In this experimental study, the researchers found that beauty premium was prevalent for a bargaining task, such as negotiations or a public-facing role, but not in a data entry or analysis setting.[6]

However, it’s not always less lucrative for the less attractive. A recent study investigating public speaking fees for academics found not only an attractiveness premium for social scientists, but an unattractiveness premium for natural scientists. For every one-point decrease in facial attractiveness out of ten, natural scientists received around a 20% increase in speaking fee per hour.[7] This indicates that people will judge scientific research as of higher quality if they deem the researcher to look like a ‘typical scientist’. People may presume a skilled scientist to have a geeky or Einstein-like appearance.[8]

What does economics say about all this? Fortunately, despite abiding by a rationality that might often uphold less-than-ethical action, economic theory is against discrimination. Discrimination in the labour market, beauty-based or otherwise, is not rational. Acclaimed economist and social scientist, Gary Becker, outlined as such in his 1958 book The Economics of Discrimination.

Exploring the discrimination against African Americans prevalent at the time, Becker suggested that by discriminating against a specific group, firms failed to hire the most suitable labour which could the best produce output. Labour market discrimination, be it race or beauty or otherwise, is therefore a failure of the firm to maximise efficiency. The extrapolation of Becker’s findings into the future suggests that firms which do not discriminate will outlast those which do.[9] Of course, this is merely a mathematical interpretation of Becker’s conclusions. Simply relying on market efficiency to solve beauty discrimination is probably overly optimistic. Even so, it’s hard to come up with a more proactive solution. Faceless job interviews? More emphasis on competency testing? Finding a feasible answer is far from straightforward.

Beauty-based discrimination in the labour market is relatively absent from the public consciousness. It’s barely discussed compared to other forms of discrimination, and when it is, it isn’t taken nearly as seriously. Maybe it is a case of increased confidence and employability, or maybe it’s just harder to be angry at pretty people.  An optimist might point to Becker, and hope that future generations might enter an unbiased labour market, with market efficiency clearing discriminatory firms. Some might find that notion too unrealistic and believe greater intervention is required to eliminate beauty premiums. Whatever that solution may be, perhaps a start for now would be to examine our own personal biases.

[1] Borland, Jeff, and Andrew Leigh. “Unpacking the Beauty Premium: What Channels Does It Operate Through, and Has It Changed over Time?” Economic Record, vol. 90, no. 288, 17 Dec. 2013, pp. 17–32, onlinelibrary.wiley.com/doi/full/10.1111/1475-4932.12091, 10.1111/1475-4932.12091. Accessed 1 May 2022.

[2] Hamermesh, Daniel, and Jeff Biddle. “Beauty and the Labor Market.” NBER, Nov. 1993, www.nber.org/papers/w4518, 10.3386/w4518. Accessed 1 May 2022.

[3] Kanazawa, Satoshi, and Mary C. Still. “Is There Really a Beauty Premium or an Ugliness Penalty on Earnings?” Journal of Business and Psychology, vol. 33, no. 2, 16 Feb. 2017, pp. 249–262, personal.lse.ac.uk/Kanazawa/pdfs/JBP2018.pdf, 10.1007/s10869-017-9489-6. Accessed 1 May 2022.

[4] Rosenblat, Tanya S. “The Beauty Premium: Physical Attractiveness and Gender in Dictator Games.” Negotiation Journal, vol. 24, no. 4, Oct. 2008, pp. 465–481, onlinelibrary.wiley.com/doi/full/10.1111/j.1571-9979.2008.00198.x?casa_token=Zpgx_sKr45wAAAAA%3A2k3T0dVYprxTdzXZThAqtUq9wby7vJoqhiocvq3Qol1_A_GJUK8xyeafLof9L-yLAQFnQjFcVCVui7o7jA, 10.1111/j.1571-9979.2008.00198.x. Accessed 1 May 2022.

[5] Mobius, Markus M, and Tanya S Rosenblat. “Why Beauty Matters.” American Economic Review, vol. 96, no. 1, Feb. 2006, pp. 222–235, dash.harvard.edu/bitstream/handle/1/3043406/mobius_beauty.pdf?s.., 10.1257/000282806776157515. Accessed 1 May 2022.

[6] Deryugina, Tatyana, and Olga Shurchkov. “Now You See It, Now You Don’t: The Vanishing Beauty Premium.” Journal of Economic Behavior & Organization, vol. 116, Aug. 2015, pp. 331–345, www.sciencedirect.com/science/article/pii/S0167268115001420, 10.1016/j.jebo.2015.05.007. Accessed 1 May 2022.

[7] Bi, Weilong, et al. ““Beauty” Premium for Social Scientists but “Unattractiveness” Premium for Natural Scientists in the Public Speaking Market.” Humanities and Social Sciences Communications, vol. 7, no. 1, 7 Oct. 2020, www.nature.com/articles/s41599-020-00608-6, 10.1057/s41599-020-00608-6. Accessed 1 May 2022.

[8] Gheorghiu, Ana I., et al. “Facial Appearance Affects Science Communication.” Proceedings of the National Academy of Sciences, vol. 114, no. 23, 22 May 2017, pp. 5970–5975, www.pnas.org/content/pnas/114/23/5970.full.pdf, 10.1073/pnas.1620542114. Accessed 1 May 2022.

[9] Becker, Gary Stanley. The Economics of Discrimination. Chicago; London, The University Of Chicago Press, 1957.

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