What? Smurfs? The observation that sky light was blue was made back in the Rennaisance. It is one of the key facts behind the standard theatrical lighting set-ups, as well as typical painting of highlights and shadows in my business. The blue effect is due to Rayleigh scattering (first described by John Rayleigh in 1870). The shorter wavelengths (of the full spectrum coming from the sun) are absorbed more often by gas molecules of the atmosphere. When they are re-radiated, they are no longer directional but instead are scattered through the thickness of the atmosphere. What remains of the sunlight is thus, also, more yellow than it would be. By the way, you can simulate this effect at home with a glass jar full of water with a little milk in it, a dark room and a strong flashlight. The reasons why we don't look like Smurfs (at least not usually) are two; the main reason is that the effect of this blue sky light is overpowered by the effects of direct sunlight and often washed out by interobject reflectivity of all the other material in the vicinity. If you are standing near a large building it will block all the blue from that side (think of the skylight as being from a dome at infinate distance from the scene), and paint the subject with the whitish light of sunlight off concrete. The other is that our eyes, unlike cameras, are self-correcting. We set our own "white point" constantly. Ever notice how, when you go indoors in the middle of the day all the lights look nasty and yellowed? But then, if you visit the same building in the middle of the night, the lights will look almost white. A last point is that the skylight is not a constant. On an overcast day, much more light is scattered, and shadows become very soft and pale. These are good days for photographs. During sunset and sunrise the scattering becomes more pronounced, with more of the shorter wavelengths removed from the sunlight -- and many of those are "lost" (sent to light areas off on the horizon) before they reach your present viewpoint. Thus, both sun and sky go through orange and reds, and blues are almost completely removed.