The wage premium for beautiful people is about _________ percent, while the wage penalty for unattractive people is about _________  percent. 

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Application 3 THE BEAUTY PREMIUM APPLYING THE CONCEPTS # 3: What explains differences in wages? 9000 How does physical attractiveness affect earnings? Studies of the U.S. labor market show that beautiful people earn more than people of average looks, and unattractive people earn less. The beauty premium is 5 percent for the 33 percent of workers who are considered beautiful or handsome, and the beauty premium is larger for men than for women. The penalty for bad looks is about 8 percent for the 10 percent of workers who are consid- ered plain or unattractive. The beauty premium and the plain penalty have been observed in other countries and within spe- cific occupations such as lawyers. Why do beautiful people earn more income? According to biologists, beauty is a marker for underlying characteristics such as health and intelligence, and beautiful people start with a slight edge in the labor market. Beautiful people get more opportuni- ties to learn through experience, and they also acquire better professional contacts. Because of these wider opportunities, a small difference in innate characteristics can be amplified into a large difference in earnings. Another factor in the beauty pre- mium is that some workers and consumers simply like dealing with attractive people, so there is a higher demand for beautiful workers, resulting in higher wages. Related to Exercises 3.10 and 3.11. SOURCES: Based on Daniel Hamermesh and Jeff Biddle, "Beauty and the Labor Market," American Economic Review 84 (2001), pp. 1174-1194; "To Those That Have, Shall Be Given," The Economist, December 22, 2007, pp. 53-54.