It is well known from labour market studies that beauty and gender can have big effects on earnings, with attractive people earning more money than unattractive people. There is also a significant and persistent male-female wage gap. Even when controlling for age and experience, men earn about 25% more than women.
While some of these differences can be attributed to labour market factors, much of the beauty premium and wage gap remains unexplained. With labour market studies as inspiration, economists, Andreoni and Petrie (2007), looked at the returns to beauty and gender in an economic laboratory experiment where there are benefits to group cooperation.
Group members were identified with passport-style photographs. In one study, group members knew only the total amount contributed to the public good by the group, while in the other study they also knew the exact contribution of each group member. Subjects’ photos were later independently rated in terms of physical attractiveness and how helpful-looking the subject appears.
In general, the results show significant and surprising effects of beauty and gender on earnings. When performance is unknown, people tend to reward beauty and females. And, when performance is known, the beauty premium disappears and the female premium switches to a male premium.
The most striking result from this research is that, on average, men and women did not behave very differently, and attractive people did not behave appreciably differently than unattractive people. Nonetheless, beauty and gender had significant effects on earnings. This happened because beauty and gender affect the way people were treated by others.
Beautiful people tend to be in more successful teams because other team members are more cooperative in the presence of beautiful people. This is true when effort is not observable, and suggests that a beauty premium may be more likely to exist when productivity is not perfectly observed, implying that beautiful people may also sort into occupations where individual productivity is difficult to measure.
The gender gap can possibly be explained by a different stereotype for men. While beautiful people benefit from a stereotype of being more cooperative team members, men in this experiment benefit from exceeding the low expectations others have of them. People seem to expect men to be less helpful than they are. When they see men exceeding expectations, they respond by following their lead.
References
Andreoni, J., & Petrie, R. (2007). Beauty, Gender and Stereotypes: Evidence from Laboratory Experiments. Journal of Economic Psychology, In Press, Accepted Manuscript.
