Discrimination and development: The case of beauty in China

Huge econometric literatures examine discrimination in wealthy countries, but very little is available on poorer countries. In this study we combine labor-market information, appraisals of respondents' beauty, and household expenditures to examine within a unified framework the role of beauty in economic success in China and the relative importance of the investment and consumption aspects of beautifying expenditures. We find that in China, beauty raises women's earnings adjusted for a wide range of controls. Additional spending on clothing and cosmetics has a generally positive marginal impact on a woman's perceived beauty. The relative size of the effect demonstrates, however, that such purchases pay back no more than 15 percent of additional expenditure in the form of higher earnings. Most such spending represents consumption. The overall effect of beauty on wages appears to be at least as high, or even higher, than in rich economies.