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Popularity and Earning Potential

Written by Nickel - One Comment

Years ago — during the first month of this site’s existence, in fact — I wrote about the fact that “good looking” people tend to earn more than others. In fact, they claimed there was a “plainness penalty” of 9% and a “beauty premium” of as much as 5%.

Given the above, it should perhaps come as no surprise that the National Bureau of Economic Research (NBER) has recently found that popularity also pays off. In fact, those in the top 10% in terms high school popularity (based on data from the Wisconsin Longitudinal Study way back in 1957) were found to command a 10% salary premium 40 years after graduation as compared to those in the bottom fifth.

Interestingly, they don’t ascribe this to any innate personality traits. Rather, they argue that those who know how to play the game in the high school tend to figure out what they need to succeed once they hit the workplace. Given the above, they suggest that schools might want to consider adding a social component to their academic training.

Of course, as with all studies of this sort, it’s very difficult to control for all possible explanatory variables. Nonetheless, it’s an interesting study with a very interesting result.

Source: NBER via WSJ.com

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Published on October 22nd, 2012
Modified on October 27th, 2012 - One Comment
Filed under: Working

About the author: Nickel is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!

One Response to “Popularity and Earning Potential”

1
William @ Drop Dead Money Says:
October 23rd, 2012 at 11:20 am
Yep, I figured that out early in my career, and it’s one of the things that always motivated me to be like Avis and try harder.

I’ve also seen most “pretty people” marriages either be unhappy or not last, while more of the “average folks” tend to be happier in the thing that matters most – the home.

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