Friday, April 14, 2006

The Beauty Premium

Employers use applications and interviews to estimate the productivity of would-be workers. Problems arise when discriminatory or unwitting employers overestimate (or underestimate) a job candidate’s productivity based on often irrelevant traits like beauty, race, gender, sexuality, or belief system. As Hal Varian points out in his latest New York Times column, economic evidence suggests that beautiful people tend to earn higher wages than their more homely counterparts, even in jobs where looks don't affect performance. Why the beauty premium?

Varian points readers to some research by economists Markus Mobius and Tanya Rosenblat. Mobius and Rosenblat conducted some experiments where subjects were either employers or job candidates. Employers had to estimate the productivity of potential workers. The job in question? Solving mazes--as many mazes as possible in 15 minutes. As part of the evaluation, would-be maze workers had to work through a sample maze and provide the employers with a self-estimate of how many mazes they could complete in 15 minutes. Mobius and Rosenblat found that employers tend to overestimate the productivity of attractive people partly because the beautiful people overestimate themselves. Read Varian's column to get the specifics of the experiment.

1. To understand whether beauty affects an employer's estimate of a would-be worker's productivity, researchers need to define beauty. How did Mobius and Rosenblat determine which of their subjects were beautiful?

2. During the evaluation, candidates had to provide a self-estimate of how many mazes they could complete in 15 minutes. Was there a difference between the estimates of the beautiful and the not-so-beautiful? When the job candidates actually completed the 15 minute maze tasks, was there any difference between the productivity of the beautiful and the not-so-beautiful?

3. The experiment used several different interview methods for evaluating job candidates. Beauty did not influence employer estimates of productivity in evaluations based solely on resumes. Why did beautiful people fare better in phone-based evaluations where the employer could not even see the candidate?

4. Economists Cecilia Rouse and Claudia Goldin found evidence that American symphonies used to discriminate against women in auditions. Their research suggests that the advent of blind auditions markedly improved a woman's chance of selection to the symphony. How should companies structure the hiring process if they want to remain as neutral as possible with respect to traits like beauty, gender, or race?

Topics: Labor markets, Behavior


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