Unpacking the beauty premium : What channels does it operate through , and has it changed over time ? *

Using data from representative samples of the Australian population in the 1980s and 2000s we make two main contributions to analysis of the economic effects 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 – primarily via respondents’ probability of employment and their hourly wage, and whether they have a partner who contributes income to the household. Second, we examine whether the returns to beauty in Australia have changed between the 1980s and 2000s. Returns to beauty from the effect on a worker’s hourly wage have been constant across this period. We do find, 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.