Economic Theory

The economics of beauty: What do we know? What should we do?

The media have been excited by two American management academics, Leah Sheppard and Stefanie Johnson, who claim to find that highly attractive women are not rated as trustworthy as less attractive women and men. The implication of much of the discussion seems to be that attractive women are discriminated against.

I have doubts about this study, which is an experimental one where participants recruited on the internet judge the truth of business statements, made by fictitious women and men, which are accompanied by photographs pre-rated for attractiveness. This type of experimental study needs to be interpreted very carefully. For one thing, it cannot be assumed that suspicion of what the authors call ‘femmes fatales’ would lead to disadvantage in job hiring or promotion opportunities in the real world, particularly as the study shows that this supposed prejudice disappears if respondents are primed to feel sexually secure by planting the thought that their own romantic partners are faithful.

More importantly, the findings seem to go against a substantial economics literature which suggests that attractiveness, rather than carrying a penalty, in reality boosts earnings in the labour market.

Two classic papers are often quoted. The first, a 1995 piece by Daniel Hamermesh and Jeff Biddle, found that the wages of US and Canadian workers with below-average looks were significantly lower than those of good-looking people, after controlling for relevant economic characteristics such as experience, years with the employer, union membership and so on. Later work by Barry Harper used a similar methodology, and came to the same conclusion, in the context of the British labour market.

Both these sources suggest something which may be rather surprising: that the ‘attractiveness premium’ is greater for men than for women, which suggests that there is something more subtle than sex going on here. The controversial sociologist Catherine Hakim has written of ‘erotic capital’ which includes dress sense, personability and social confidence as well as strikingly good looks, and which is partly produced by inputs of time and money (like other forms of capital) rather than simply accidents of birth. People who present themselves well and invest resources in personal grooming will do better in the labour market.  If well-groomed men are rarer than well-groomed women, which is distinctly feasible, it seems likely that they will obtain a higher premium reflecting their scarcity value.

Both Hamermesh/Biddle and Harper also find that being tall carries a premium for both men and women, possibly because height carries a suggestion of authority. And they find that being obese carries a negative premium. These findings have been supported in many studies, including one major recent project in which medical researchers used the UK Biobank to show a causal relationship between height and body mass index and socio-economic status.

Whether you believe that good looks and other aspects of physical appearance carry a penalty or a reward, the issue does raise public policy concerns in some quarters. There have been suggestions that discrimination by appearance should be expressly forbidden by law, though quite how that would work in practice is unclear. One predictable suggestion from HR specialists is that recruitment panellists should receive compulsory training on how to ignore looks at interviews.

We should, however, be wary of assuming that pay differences represent discrimination in the economist’s sense, ie. that people are being paid more or less than their productivity warrants as a result of prejudice.

As Eva Sierminska has pointed out, higher pay for more attractive people across the economy may represent the result of rational occupational sorting. Attractive men and women tend to gravitate to occupations where good-looking, personable and self-confident people have an advantage – acting, TV presenting, sales occupations, dealing with business or legal clients on a personal basis. Their higher productivity in these fields justifies their higher pay. Attempting to redress this by imposing less-attractive individuals might reduce movie-going and TV viewing figures and lead to lower house sales, less happy business clients and fewer deals. While such consequences might I suppose be justified by some higher social goal, they do have real economic costs.

More generally, the findings of economists suggest that premia and penalties associated with personal appearance affect both men and women, and should make us think more carefully about simplistic policies in relation to the gender pay gap. The labour market does not treat all women worse than all men.

There is evidence of the existence of significant pay gaps associated with ethnicity, religion, age, sexual orientation and birth order, to name just a few. Gaps based on personal appearance just add to the complexity, and show once again the hubris of politicians who seem to think they can create a utopian society, where everybody is treated absolutely equally, by laws, virtue-signalling and bullying businesses.


Editorial and Research Fellow

Len Shackleton is an Editorial and Research Fellow at the IEA and Professor of Economics at the University of Buckingham. He was previously Dean of the Royal Docks Business School at the University of East London and prior to that was Dean of the Westminster Business School. He has also taught at Queen Mary, University of London and worked as an economist in the Civil Service. His research interests are primarily in the economics of labour markets. He has worked with many think tanks, most closely with the Institute of Economic Affairs, where he is an Economics Fellow. He edits the journal Economic Affairs, which is co-published by the IEA and the University of Buckingham.

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