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The incidence of the healthcare costs of obesity

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  • Bhattacharya, Jay
  • Bundorf, M. Kate
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    Abstract

    Who pays the healthcare costs associated with obesity? Among workers, this is largely a question of the incidence of the costs of employer-sponsored coverage. Using data from the National Longitudinal Survey of Youth and the Medical Expenditure Panel Survey, we find that the incremental healthcare costs associated with obesity are passed on to obese workers with employer-sponsored health insurance in the form of lower cash wages. Obese workers without employer-sponsored insurance do not have a wage offset relative to their non-obese counterparts. A substantial part of the lower wages among obese women attributed to labor market discrimination can be explained by their higher health insurance premiums.

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    File URL: http://www.sciencedirect.com/science/article/B6V8K-4VXB8R2-1/2/0efc910987a9f90d111e1b96d1f503ef
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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Health Economics.

    Volume (Year): 28 (2009)
    Issue (Month): 3 (May)
    Pages: 649-658

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    Handle: RePEc:eee:jhecon:v:28:y:2009:i:3:p:649-658

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    Web page: http://www.elsevier.com/locate/inca/505560

    Related research

    Keywords: Obesity Compensating differential Employer-sponsored health insurance Discrimination Wage;

    References

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    1. David Cutler & Edward Glaeser & Jesse Shapiro, 2003. "Why Have Americans Become More Obese?," NBER Working Papers 9446, National Bureau of Economic Research, Inc.
    2. Gruber, Jonathan, 1994. "The Incidence of Mandated Maternity Benefits," American Economic Review, American Economic Association, vol. 84(3), pages 622-41, June.
    3. John Cawley, 2004. "The Impact of Obesity on Wages," Journal of Human Resources, University of Wisconsin Press, vol. 39(2).
    4. Ehrlich, Isaac & Becker, Gary S, 1972. "Market Insurance, Self-Insurance, and Self-Protection," Journal of Political Economy, University of Chicago Press, vol. 80(4), pages 623-48, July-Aug..
    5. Jay Bhattacharya & Darius Lakdawalla, 2004. "Time-Inconsistency and Welfare," NBER Working Papers 10345, National Bureau of Economic Research, Inc.
    6. Cutler, David & Shapiro, Jesse & Glaeser, Edward, 2003. "Why Have Americans Become More Obese," Scholarly Articles 2640583, Harvard University Department of Economics.
    7. Darius Lakdawalla & Tomas Philipson, 2002. "The Growth of Obesity and Technological Change: A Theoretical and Empirical Examination," Working Papers 0203, Harris School of Public Policy Studies, University of Chicago.
    8. Becker, Gary S., 1971. "The Economics of Discrimination," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226041162.
    9. Louise Sheiner, 1999. "Health care costs, wages, and aging," Finance and Economics Discussion Series 1999-19, Board of Governors of the Federal Reserve System (U.S.).
    10. Rothschild, Michael & Stiglitz, Joseph E, 1976. "Equilibrium in Competitive Insurance Markets: An Essay on the Economics of Imperfect Information," The Quarterly Journal of Economics, MIT Press, vol. 90(4), pages 630-49, November.
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    Citations

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    Cited by:
    1. Mikko Packalen & Jay Bhattacharya, 2010. "The Other Ex-Ante Moral Hazard in Health," Working Papers 1015, University of Waterloo, Department of Economics, revised Dec 2010.
    2. Jessica Vistnes & Thomas Selden, 2011. "Premium growth and its effect on employer-sponsored insurance," International Journal of Health Care Finance and Economics, Springer, vol. 11(1), pages 55-81, March.
    3. Cowan, Benjamin & Schwab, Benjamin, 2011. "The incidence of the healthcare costs of smoking," Journal of Health Economics, Elsevier, vol. 30(5), pages 1094-1102.
    4. Hackl, Franz & Halla, Martin & Hummer, Michael & Pruckner, Gerald J., 2012. "The Effectiveness of Health Screening," IZA Discussion Papers 6310, Institute for the Study of Labor (IZA).
    5. Arndt Reichert, 2012. "Obesity, Weight Loss, and Employment Prospects – Evidence from a Randomized Trial," Ruhr Economic Papers 0381, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    6. Chen, Alice J., 2012. "When does weight matter most?," Journal of Health Economics, Elsevier, vol. 31(1), pages 285-295.
    7. Bailey, James, 2013. "Who pays for obesity? Evidence from health insurance benefit mandates," Economics Letters, Elsevier, vol. 121(2), pages 287-289.
    8. Lusk, Jayson L., 2013. "Lunch with Pigou: Externalities and the “Hidden†Cost of Food," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 42(3), December.
    9. Vasilios Kosteas, 2012. "The Effect of Exercise on Earnings: Evidence from the NLSY," Journal of Labor Research, Springer, vol. 33(2), pages 225-250, June.
    10. PAN, Jay & QIN, Xuezheng & LIU, Gordon G., 2013. "The impact of body size on urban employment: Evidence from China," China Economic Review, Elsevier, vol. 27(C), pages 249-263.
    11. Wehby, George L. & Murray, Jeffrey C. & Wilcox, Allen & Lie, Rolv T., 2012. "Smoking and body weight: Evidence using genetic instruments," Economics & Human Biology, Elsevier, vol. 10(2), pages 113-126.
    12. Manan Roy, 2011. "How Well Does the U.S. Government Provide Health Insurance?," Departmental Working Papers 1102, Southern Methodist University, Department of Economics.

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