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Who pays for obesity? Evidence from health insurance benefit mandates


  • Bailey, James


Is there an obesity externality? In the late 1990s and early 2000s, many state governments began requiring health insurance plans to cover treatments for diabetes. Using difference-in-difference analysis of restricted geocode data from the 1979 National Longitudinal Survey of Youth to compare wages across states with and without diabetes mandates, I find that obese people pay for all of their own increased health costs in the form of lower wages, rather than passing them on to employers, insurers, and co-workers.

Suggested Citation

  • Bailey, James, 2013. "Who pays for obesity? Evidence from health insurance benefit mandates," Economics Letters, Elsevier, vol. 121(2), pages 287-289.
  • Handle: RePEc:eee:ecolet:v:121:y:2013:i:2:p:287-289 DOI: 10.1016/j.econlet.2013.08.029

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    References listed on IDEAS

    1. Jay Bhattacharya & Neeraj Sood, 2011. "Who Pays for Obesity?," Journal of Economic Perspectives, American Economic Association, vol. 25(1), pages 139-158, Winter.
    2. Jonathan Klick & Thomas Stratmann, 2007. "Diabetes Treatments and Moral Hazard," Journal of Law and Economics, University of Chicago Press, vol. 50, pages 519-538.
    3. James Bailey, 2014. "Who pays the high health costs of older workers? Evidence from prostate cancer screening mandates," Applied Economics, Taylor & Francis Journals, vol. 46(32), pages 3931-3941, November.
    4. Kowalski Amanda E. & Congdon William J. & Showalter Mark H., 2008. "State Health Insurance Regulations and the Price of High-Deductible Policies," Forum for Health Economics & Policy, De Gruyter, vol. 11(2), pages 1-26, November.
    5. David N van der Goes & Justin Wang & Katharine C Wolchik, 2011. "Effect of State Health Insurance Mandates on Employer-provided Health Insurance," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 37(4), pages 437-449.
    6. Bhattacharya, Jay & Bundorf, M. Kate, 2009. "The incidence of the healthcare costs of obesity," Journal of Health Economics, Elsevier, vol. 28(3), pages 649-658, May.
    7. Gruber, Jonathan, 1994. "The Incidence of Mandated Maternity Benefits," American Economic Review, American Economic Association, vol. 84(3), pages 622-641, June.
    8. Summers, Lawrence H, 1989. "Some Simple Economics of Mandated Benefits," American Economic Review, American Economic Association, vol. 79(2), pages 177-183, May.
    9. Gruber, Jonathan, 1994. "State-mandated benefits and employer-provided health insurance," Journal of Public Economics, Elsevier, vol. 55(3), pages 433-464, November.
    10. Joanna N. Lahey, 2012. "The efficiency of a groupā€specific mandated benefit revisited: The effect of infertility mandates," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 31(1), pages 63-92, December.
    11. James Bailey, 2013. "The Effect of Health Insurance Benefit Mandates on Premiums," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 40(1), pages 119-127, December.
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    Cited by:

    1. Depew, Briggs & Bailey, James, 2015. "Did the Affordable Care Act's dependent coverage mandate increase premiums?," Journal of Health Economics, Elsevier, vol. 41(C), pages 1-14.

    More about this item


    Obesity; Employer-based health insurance; NLSY geocode; Diabetes mandates;

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General


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