Unpacking the Beauty Premium: What Channels Does It Operate Through, and Has It Changed Over Time?

Abstract

Using data from representative samples of the Australian population in 1984 and 2009, we make two main contributions to analysis of the economic returns of beauty. First, we broaden analysis of the effects of beauty beyond the labour market to examine its relation to household income. We find that beauty significantly affects total household income – via respondents' probability of employment and their hours of work and hourly wage, and whether they have a partner who contributes income to the household. Second, we examine whether the returns to beauty in Australia changed between the 1980s and 2000s. It is found that, for the most part, the effect of beauty was constant across this period. There is, however, some evidence of an increasing effect of beauty on the likelihood that a female respondent is employed, which we suggest may be due to selection effects and the growth in female workforce participation.

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