Economics Letters 108 (2010) 10–12 Contents lists available at ScienceDirect Economics Letters j o u r n a l h o m e p a g e : w w w. e l s ev i e r. c o m / l o c a t e / e c o l e t Physical appearance and wages: Do blondes have more fun? David W. Johnston ⁎ Queensland University of Technology, School of Economics and Finance, Australia a r t i c l e i n f o Article history: Received 8 February 2009 Received in revised form 23 March 2010 Accepted 26 March 2010 Available online 31 March 2010 a b s t r a c t This study contributes to the economics literature that links physical characteristics to labour market outcomes, by investigating the influence of hair colour on women's own wages and also their spouse's wages. Using U.S. panel data, we find that blonde women receive large wage premiums. © 2010 Elsevier B.V. All rights reserved. Keywords: Beauty Wages Discrimination JEL classification: J71 J10 1. Introduction A growing economics literature links physical characteristics to labour market outcomes, especially wages. For example, Hamermesh and Biddle (1994), Harper (2000) and Mobius and Rosenblatt (2006) examine the labour market effects of beauty; Cawley (2004) and Averett and Korenman (1996) the effects of obesity; and Persico et al. (2004) and Case and Paxson (2008) the effects of height. We contribute to this literature by investigating the influence of an iconic physical characteristic – blonde hair – on women's own wages and also their spouse's wages. The media often depicts blonde women as being more attractive than other women, but also less intelligent. These depictions seem to reflect public perceptions. For example, Price (2008) reports higher mean beauty ratings for Caucasian blonde females than for Caucasian brunette females or minority females. Moreover, Rich and Cash (1993) find a substantial over-representation of blonde females in the media, and conclude that female blondeness is associated with beauty and sexuality. With respect to the low intelligence perception, Kyle and Mahler (1996) find that people rate blondes as less capable than brunettes, based purely on photographs. To the extent that these perceptions also hold true in the labour and marriage markets, blondeness could positively or negatively affect wages: positively if the beauty perception dominates, negatively if the low intelligence perception dominates. ⁎ Corresponding author. Queensland University of Technology, School of Economics and Finance, Level 8, Z Block, Gardens Point Campus, Brisbane, Queensland, 4001, Australia. Tel.: +61 7 31386789. E-mail address: [email protected]. 0165-1765/$ – see front matter © 2010 Elsevier B.V. All rights reserved. doi:10.1016/j.econlet.2010.03.015 Using U.S. panel data, we find that blonde women receive a large wage premium. In fact, the blonde wage premium is similar in size to the return from an extra year of schooling. We also find that the spouses of blonde women receive higher wages. These results broadly agree with the findings in Price (2008), which show that blonde Caucasian females have greater fund raising success than their brunette counterparts.1 2. Data Our data source is the 1979 cohort of the National Longitudinal Survey of Youth (NLSY79). This panel data set is based on a sample of 12,686 Americans residing in 8770 unique households who were 14– 21 years old in January 1979. Respondents were first interviewed in 1979 and were re-interviewed annually from 1979 to 1994, and biennially from 1994 to 2006. We limit our sample to Caucasian women aged 25 and over.2 The Caucasian restriction is imposed because race influences both hair colour and labour market outcomes. The age restriction is imposed because we want to control for differences in the life-cycle earnings profile. Differences in the earnings profile may arise, for example, from differences in highest educational attainment or occupation, which may be associated with appearance. 1 We've focused on women in this paper because hair colour is associated with certain stereotypes for women that do not exist for men. In accordance with this difference between genders, we find no significant hair colour effects for men. 2 Caucasian respondents are those that both describe themselves as neither black nor Hispanic nor Asian, and are described as white by the interviewer. D.W. Johnston / Economics Letters 108 (2010) 10–12 11 Hair colour is measured by responses to a question in the 1985 survey: “What is your natural hair colour”. Women in our sample responded with the following: light blonde (1.6%), blonde (19.0%), light brown (21.8%), brown (51.2%), black (2.4%) and red (4.0%).3 Women are classified as blonde if they answered light blonde or blonde. Table 1 presents sample means of log hourly wages, spouse's log hourly wages and selected covariates. These statistics show that blonde women have higher log wages than other women, and that their spouse's have higher log wages than the spouse's of other women. There are, however, few clear differences between women in their characteristics. Blonde women are lighter than brunette women, but there are no systematic differences in education, Armed Forces Qualification Test (AFQT) scores, immigrant status or marital status. From these raw statistics it appears that differences in wages by hair colour are not driven by differences in productivity related characteristics. Table 1 Sample means of wages and selected characteristics by hair colour. 3. Empirical results Note: Figures in parentheses are robust standard errors. * and ** represent significant difference from blonde haired women at 0.05 and 0.01 level, respectively. We further examine the effect of hair colour on earnings by estimating a traditional log wage equation ln ðwit Þ = β0 + β1 HCi + β2 Xit + εit ð1Þ where wit is the real hourly wage of individual i in period t, HCi is a vector representing natural hair colour, Xit is a vector of control variables and εit is a random error term. The control variables include standard demographic characteristics that have been shown to influence wages (age, age squared, education, marital status, and immigrant status) and measures of physical appearance that may be correlated with hair colour (eye colour, height, and weight). An advantage of estimating the effect of natural hair colour compared with other physical characteristics, such as subjectively rated beauty, weight or height, is that individual or family attributes (e.g. productivity, income, and nutrition) cannot alter natural hair colour. Thus, the estimates of β1 in Eq. (1) are less likely to suffer from omitted variable bias or reverse causality. A possibility, however, is that blonde hair is more common in certain ethnicities (e.g. Nordic) and that these ethnicities are favoured in the labour market (e.g. because of a high cultural work ethic). Fortunately, the NLSY contains detailed information on ethnicity and so we include in each specification indictors of whether the individual classifies themselves as English, French, German, Irish, Italian, Polish, Scottish or American. Another possibility is that blonde hair is correlated with unobserved physical characteristics, such as fair skin. This implies that if fair skin, for example, positively affects wages then the estimated blonde wage effect will be upwards biased. We do not see this as a major drawback, however, as the estimate would still reflect the influence of having a blonde appearance. An additional methodological issue is that women's current hair colour may not be their natural hair colour. For example, some naturally brunette women may look blonde. Such misclassification introduces measurement error into our hair colour indicators and so our estimated effects may suffer from attenuation bias. In other words, the true effects may in fact be larger than our estimates. Column 1 in Table 2 presents random effects estimates of Eq. (1). The estimates suggest that blonde women earn 7% more than brunette women (the omitted hair colour category).4 Surprisingly, this wage premium is as large as the return to an extra year of 3 Forty-six women do not have a recorded hair colour. We include a dummy variable in all regressions to control for this missing information. 4 If OLS is used we find that blonde women earn eight percent more than brunette women. A random effects approach is preferred to OLS because it more adequately captures the panel structure of the data. Of course, a fixed effects approach is not possible because hair colour is time-invariant. Log hourly wage Spouse's log hourly wage Height (in.) Weight (lb) Education (years) AFQT percentile Immigrant Married Sample size Blonde Light Brown Brown All others 2.641 (0.011) 3.056 (0.012) 65.00 (0.039) 146.0 (0.560) 13.89 (0.035) 0.587 (0.004) 0.020 (0.002) 0.633 (0.007) 4288 2.576 (0.010) 2.950** (0.012) 64.68 (0.038) 143.6 (0.544) 13.90 (0.034) 0.602 (0.004) 0.022 (0.002) 0.637 (0.007) 4573 2.527** (0.007) 2.983* (0.008) 64.82 (0.025) 150.4* (0.363) 13.61 (0.022) 0.565 (0.003) 0.019 (0.001) 0.673 (0.005) 10,373 2.539* (0.017) 2.991 (0.019) 64.39* (0.065) 150.2 (0.925) 13.66 (0.057) 0.566 (0.007) 0.030 (0.004) 0.676 (0.012) 1606 education. No other hair colour influences wages — light brown, red and black are individually and jointly insignificant (p-value equals 0.94 in the RE model).5 Therefore, it seems that the association between blonde women and beauty dominates any perception that blonde women have low intelligence, and so consequently our results are most readily explained by appealing to the economics of beauty literature. Mobius and Rosenblatt (2006) find that the beauty premium exists because attractive workers are more confident, have greater communication and social skills, and are wrongly considered by employers to be more productive. To better understand the causes of the blonde wage premium, we examine whether it arises from general employer discrimination in favour of blonde haired women or from occupation-specific productivity effects. If the wage premium is related to attractiveness, blonde women may have a productivity advantage in occupations that involve interactions with customers or co-workers.6 We test this proposition by augmenting our log wage equation with occupation terms and occupation–blondeness interaction terms7: ln ðwit Þ = β0 + β1 HCi + β2 Xit + β3 OCCit ð2Þ + β4 ðOCCit × HCi Þ + νi + εit We estimate Eq. (2) and find that all interaction terms are highly insignificant (test of joint significance has a p-value equal to 0.82). This result suggests that the blondeness premium is not occupationspecific; however, the analysis is limited by the lack of a firm determination of occupations in which looks are likely to enhance productivity (for a discussion see Hamermesh and Biddle, 1994). It seems plausible that blondeness may also improve women's fortunes in the marriage market, as blonde women would have an advantage through their higher attractiveness ratings and wages (Becker, 1973). Marriage market research demonstrates that men's traditional role as a financial provider makes males with high wages more desirable marriage and dating partners. Thus, we'd expect 5 It's possible that hair colour directly affects some of the included controls, such as education and marriage, and consequently we may be suppressing a portion of the effect. A random effects model including only physical appearance and ethnicity variables produces a blondeness coefficient equal to 0.075, which is similar to the coefficient in the expanded model. All other hair colour coefficients are again insignificantly different from zero. 6 Results from a multinomial logit model of occupational choice suggest that blonde women are marginally less likely to be employed in sales and administration jobs than brunette women; however, the effects are significant only at the 0.10 level. 7 We follow Harper (2000) and include broad occupation categories: professional, technical, sales, clerical, service, manual. 12 D.W. Johnston / Economics Letters 108 (2010) 10–12 Table 2 Estimated effects of hair colour on log wages. Blonde hair Light brown hair Black hair Red hair Blue eyes Green eyes Hazel eyes Height (in.) Weight (lb/100) Age Age squared/100 Education (years) AFQT percentile Immigrant Married Sample size Own wage Spouse's wage 0.072** (0.027) − 0.002 (0.026) − 0.001 (0.069) − 0.033 (0.057) 0.032 (0.027) 0.067* (0.030) 0.041 (0.030) 0.008** (0.002) − 0.044* (0.021) 0.033** (0.010) − 0.036** (0.013) 0.071** (0.006) 0.485** (0.049) − 0.021 (0.065) 0.003 (0.013) 20,840 0.064* (0.032) − 0.017 (0.030) 0.084 (0.078) − 0.078 (0.056) 0.004 (0.030) − 0.026 (0.033) 0.025 (0.034) 0.002 (0.002) − 0.096** (0.025) 0.071** (0.010) − 0.070** (0.013) 0.031** (0.006) 0.331** (0.054) 0.126+ (0.075) 15,538 Note: Robust standard errors shown in parentheses. * and ** represent significance at 0.05 and 0.01 level, respectively. Controls for a small number of missings on hair and eye colour, weight and AFQT are included in each regression, but not shown. Also included but not shown are a time trend and detailed controls for ethnicity. Omitted dummy variable categories are: brown hair, brown eyes, USA born and not married. blonde women to form matches with higher socioeconomic status men. In column 2, we present the estimated effect of blonde hair on spouse's log earnings. Indeed, we do find large significant effects from having blonde hair. Spouses of blonde women are estimated to earn around 6% more than the spouses of other women. As for women's own wages, other hair colours are individually and jointly insignificant. 4. Conclusions This study investigates the influence of hair colour, in particular blonde hair, on women's own wages and also their spouse's wages using a large U.S. data set. Regression results indicate that blonde women receive a wage premium equivalent in size to the return for an extra year of schooling. A significant blondeness effect is also evident in the marriage market. 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