BEAUTY PREMIUM AND MARRIAGE PREMIUM IN SEARCH EQUILIBRIUM: THEORY AND EMPIRICAL TEST

Roberto Bonilla, Francis Kiraly and John Wildman

International Economic Review, 2019, vol. 60, issue 2, 851-877

Abstract: We propose a theoretical explanation for the so‐called beauty premium. Our approach relies entirely on search frictions and the fact that physical appearance plays an important role in attracting a marriage partner. We analyze the interaction between frictional labor and marriage markets, making use of what we label constrained job search. The optimal strategy entails different reservation wages for different men, and we establish the existence of a search equilibrium characterized by a beauty premium and/or marriage premium. Predicted profiles of premia allow for potential falsification tests and point to relevant empirical evidence in support of our theory.

Date: 2019
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https://doi.org/10.1111/iere.12370

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Working Paper: Beauty Premium and Marriage Premium in Search Equilibrium: Theory and Empirical Test (2015)
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