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Beautiful People May Merit Their Extra Pay: Eco Research Roundup

Beautiful People May Merit Their Extra Pay: Eco Research Roundup

(Bloomberg) -- Pretty people earn more, and it may be at least partly justified by their productivity.

That’s the insight from the lead item in this week’s economic-research roundup, which also delves into how much of an advantage employed job-seekers enjoy, who gets hit hardest in the Paris climate agreement, which imports are subject to tariffs in America and how heroin took the baton from Purdue Pharma Inc.’s OxyContin in 2010.

Check this column each week for the latest economic research from around the world.

Beauty Phenomenon

Beauty, Job Tasks, and Wages: A New Conclusion about Employer Taste-Based Discrimination
Published April
Available on the NBER website

Beautiful people take home better paychecks on average -- and that might be a rational bias on behalf of employers. A dig into the details shows that the premium comes from jobs where attractiveness could plausibly make a worker more effective, like careers with lots of interpersonal interaction. By contrast, there is no beauty boost in jobs like data analysis, where looking good would have no discernible effect on an employee’s output.

“Physically attractive workers sort into jobs where beauty is valued, just as theory would predict for any other productive attribute,” the authors write. They come up with their results by measuring attractiveness on college-ID photos and examining both detailed wage information and data describing tasks performed on jobs. Their results apply specifically to a set of people who attended one school, Berea College in Kentucky, so it’s an open question whether they’d be broadly applicable.

Employment Advantage

Do the Employed Get Better Job Offers?
Published April 4
Available at the New York Fed website

It’s easier to get a job if you already have one, and this new New York Fed blog post shows just how much of an advantage employed job-seekers enjoy. In a survey of job seekers, the unemployed accepted about half of the best offers that came across their desks, compared with 30 percent for the employed. The fact that folks who already have jobs may not be all that surprising, but this is: Employed job seekers receive hourly-wage offers that are 48 percent higher than those the unemployed receive. Even controlling for factors such as education and experience, the employed saw wage offers that were 23 percent higher on average. Plus, about 63 percent of offers received by the non-employed didn’t have benefits, versus only 40 percent of offers to the employed.

Winning Paris?

Paris Climate Agreement and the Global Economy: Winners and Losers
Published April 3
Available at the World Bank website

If the 2015 Paris climate accord is fully implemented, the economic impacts would be mostly felt in the European Union, based on a new World Bank analysis. The result would be a 1 percent to 1.5 percent loss of gross domestic product by 2030, as the area significantly cuts emissions. Australia, New Zealand and Mexico would also face an expected GDP loss of about 1 percent. In the U.S., by contrast, the hit would be smaller -- perhaps 0.6 percent. Interestingly, big emitters such as China and India aren’t expected to take a major near-term hit from the Paris agreement, because their commitments wouldn’t take hold until later.

President Donald Trump has announced that he would like to withdraw from the Paris deal, but the U.S. can’t fully pull out until late 2020 -- right around the next presidential election.

Trade War Context

Despite talk of ‘trade war’ with China, highest U.S. tariffs are on imports from other Asian countries
Published April 5
Available on the Pew Research Center website

One thing worth noting as a trade war looms: The U.S. actually charges duties on less of what it imports from China today than in the past. Close to 76 percent of Chinese imports into the U.S. were subject to a duty in 1996, based on a Pew Research analysis, but only 41 percent of Chinese imports were dutiable last year. And the average rate on dutiable Chinese imports was 6.5 percent, based on the analysis, which is much lower than what some other Asian nations face. Bangladesh, for instance, sees duties on nearly all of its U.S. imports, and those tariffs are equal to more than 15 percent of the total value of the goods the nation sends to America.

Weekly (Demo)graphic: Heroin Deaths

How the Reformulation of OxyContin Ignited the Heroin Epidemic
Published April
Available on the NBER website

Beautiful People May Merit Their Extra Pay: Eco Research Roundup

When Purdue Pharma reformulated OxyContin to make it abuse-deterrent in 2010, many consumers substituted to inexpensive heroin. “The reformulation did not generate a reduction in combined heroin and opioid mortality -- each prevented opioid death was replaced with a heroin death.” As you can see in the chart above,“markets with greater access to heroin and markets with higher rates of pre-reformulation opioid abuse are likely to show more substitution away from opioids and towards heroin.”

To contact the reporter on this story: Jeanna Smialek in New York at jsmialek1@bloomberg.net.

To contact the editors responsible for this story: Brendan Murray at brmurray@bloomberg.net, Scott Lanman

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