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Who pays for the medical costs of obesity? New evidence from the employer mandate

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  • Conor Lennon

Abstract

Theory suggests that the medical costs of obesity should be passed on to obese workers, in the form of lower wages, whenever health coverage is a part of employee compensation. In contrast to existing work on this topic, this paper illustrates that the medical expenditures caused by obesity among working adults are relatively small and that wage offsets should therefore be difficult to detect. The paper supports this claim by exploiting the variation provided by the Affordable Care Act's employer mandate. Findings suggest that obese workers tend to bear the approximate cost of their medical expenditures via lower wages. However, the observed effects are often insignificantly different from zero.

Suggested Citation

  • Conor Lennon, 2018. "Who pays for the medical costs of obesity? New evidence from the employer mandate," Health Economics, John Wiley & Sons, Ltd., vol. 27(12), pages 2016-2029, December.
    • Handle: RePEc:wly:hlthec:v:27:y:2018:i:12:p:2016-2029
    DOI: 10.1002/hec.3818
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    Cited by:

    1. Lennon, Conor, 2022. "Employer-sponsored health insurance and labor market outcomes for men in same-sex couples: Evidence from the advent of pre-exposure prophylaxis," Economics & Human Biology, Elsevier, vol. 47(C).
    2. Kyung Min Lee & Chanup Jeung, 2021. "The incidence of the healthcare costs of chronic conditions," International Journal of Health Economics and Management, Springer, vol. 21(4), pages 473-493, December.
    3. Conor Lennon, 2019. "Employer‐Sponsored Health Insurance and the Gender Wage Gap: Evidence from the Employer Mandate," Southern Economic Journal, John Wiley & Sons, vol. 85(3), pages 742-765, January.
    4. Lennon, Conor, 2021. "Are the costs of employer-sponsored health insurance passed on to workers at the individual level?," Economics & Human Biology, Elsevier, vol. 41(C).

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