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Beauty Premium and Marriage Premium in Search Equilibrium: Theory and Empirical Test

Lookup NU author(s): Dr Roberto Bonilla Trejos, Dr Francis Kiraly, Professor John Wildman

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This is the authors' accepted manuscript of an article that has been published in its final definitive form by Wiley-Blackwell Publishing, Inc., 2019.

For re-use rights please refer to the publisher's terms and conditions.


Abstract

We propose a theoretical explanation for the so-called "beauty premium". Our explanation is based entirely on search frictions and the fact that physical appearance plays an important role in attracting a marriage partner. We analyse the interaction between frictional labour and marriage markets and establish the existence of a search equilibrium characterised by male wage differentials. The equilibrium may also display the "marriage premium", predicted to be lower among attractive men. The link between beauty premium and marriage premium provides a falsification test of the model. We carry out the empirical analysis and conclude that we cannot refute the theory.


Publication metadata

Author(s): Bonilla R, Kiraly F, Wildman J

Publication type: Article

Publication status: Published

Journal: International Economic Review

Year: 2019

Volume: 60

Issue: 2

Pages: 851-877

Print publication date: 01/05/2019

Online publication date: 21/09/2018

Acceptance date: 06/08/2018

Date deposited: 23/01/2015

ISSN (print): 0020-6598

ISSN (electronic): 1468-2354

Publisher: Wiley-Blackwell Publishing, Inc.

URL: https://doi.org/10.1111/iere.12370

DOI: 10.1111/iere.12370

Notes: The paper is available in the NUBS Discussion Paper Series.


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