Person:

Rosenblat, Tanya

We decompose the beauty premium in an experimental labor market where “employers” determine wages of “workers” who perform a maze-solving task. This task requires a true skill which we show to be unaffected by physical attractiveness. We find a sizable beauty premium and can identify three transmission channels: (a) physically attractive workers are more confident and higher confidence increases wages; (b) for a given level of confidence, physically attractive workers are (wrongly) considered more able by employers; (c) controlling for worker confidence, physically attractive workers have oral skills (such as communication and social skills) that raise their wages when they interact with employers. Our methodology can be adopted to study the sources of discriminatory pay differentials in other settings.

Advances in communication and transportation technologies have the potential to bring people closer together and create a "global village." However, they also allow heterogeneous agents to segregate along special interests, which gives rise to communities fragmented by type rather than by geography. We show that lower communication costs should always decrease separation between individual agents even as group-based separation increases. Each measure of separation is pertinent for distinct types of social interaction. A group-based measure captures the diversity of group preferences that can have an impact on the provision of public goods. While an individual measure correlates with the speed of information transmission through the social network that affects, for example, learning about job opportunities and new technologies. We test the model by looking at coauthoring between academic economists before and during the rise of the Internet in the 1990s.