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Where Does the Wage Penalty Bite?

In: Economic Aspects of Obesity

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  • Christian A. Gregory
  • Christopher J. Ruhm

Abstract

The literature examining the relationship between body mass index (BMI) and wages has fairly consistently found that BMI has a negative impact on earnings for women, and less (if any) consequences for men. In this paper, we relax the assumption -- largely unquestioned in this research -- that the conditional mean of wages is linear or piecewise linear in body mass index (BMI). Using data from the 1986 and 1999-2005 Panel Study of Income Dynamics, we estimate semi-parametric wage models that allow earnings to vary with BMI in a highly flexible manner. For women, the results show that earnings peak at levels far below the clinical threshold of "obesity" or even "overweight". For men, our main estimates suggest a reasonably flat BMI-wage profile that peaks early in the "overweight" category. However, the results of instrumental variables (IV) models or specifications focusing on long-lags of BMI are more similar to those for women. The findings for females (and the IV estimates for males) suggest that it is not obesity but rather some other factor -- such as physical attractiveness -- that produces the observed relationship between BMI and wages. We also provide non-parametric estimates of the association between BMI and health expenditures, using data from the Medical Expenditure Panel Survey. These cast further doubt on the hypothesis that the wage penalties associated with increasing BMI occur because the latter serve as an index for underlying medical costs.
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Suggested Citation

  • Christian A. Gregory & Christopher J. Ruhm, 2011. "Where Does the Wage Penalty Bite?," NBER Chapters,in: Economic Aspects of Obesity, pages 315-347 National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberch:11824
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Grossbard, Shoshana & Mukhopadhyay, Sankar, 2017. "Body-Weight and Women's Hours of Work: More Evidence That Marriage Markets Matter," IZA Discussion Papers 10775, Institute for the Study of Labor (IZA).
    2. Sonia Oreffice & Climent Quintana-Domeque, 2012. "A Matter of Weight? The Role of Spouses. Physical Attractiveness on Hours of Work," CHILD Working Papers Series 7, Centre for Household, Income, Labour and Demographic Economics (CHILD) - CCA.
    3. Chiappori, Pierre-André & Oreffice, Sonia & Quintana-Domeque, Climent, 2009. "Fatter Attraction: Anthropometric and Socioeconomic Characteristics in the Marriage Market," IZA Discussion Papers 4594, Institute for the Study of Labor (IZA).
    4. Wada, Roy & Tekin, Erdal, 2010. "Body composition and wages," Economics & Human Biology, Elsevier, vol. 8(2), pages 242-254, July.
    5. Cawley, John, 2015. "An economy of scales: A selective review of obesity's economic causes, consequences, and solutions," Journal of Health Economics, Elsevier, vol. 43(C), pages 244-268.
    6. Margareta Dackehag & Ulf-G. Gerdtham & Martin Nordin, 2015. "Productivity or discrimination? An economic analysis of excess-weight penalty in the Swedish labor market," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 16(6), pages 589-601, July.
    7. Pierre-André Chiappori & Sonia Oreffice & Climent Quintana-Domeque, 2012. "Fatter Attraction: Anthropometric and Socioeconomic Matching on the Marriage Market," Journal of Political Economy, University of Chicago Press, vol. 120(4), pages 659-695.
    8. repec:spr:izalbr:v:6:y:2017:i:1:d:10.1186_s40172-017-0059-y is not listed on IDEAS
    9. Pierre-André CHIAPPORI & Sonia OREFFICE & Climent QUINTANA-DOMEQUE, 2016. "Black-White Marital Matching: Race, Anthtopometrics and Socioeconomics," JODE - Journal of Demographic Economics, Cambridge University Press, vol. 82(4), pages 399-421, December.
    10. Scott A. Carson, 2013. "US Male Obesity from 1800-2000: A Long Term Perspective," CESifo Working Paper Series 4366, CESifo Group Munich.
    11. Courtemanche, Charles & Pinkston, Joshua C. & Stewart, Jay, 2015. "Adjusting body mass for measurement error with invalid validation data," Economics & Human Biology, Elsevier, vol. 19(C), pages 275-293.
    12. Susan L. Averett & Laura M. Argys & Jennifer L. Kohn, 2013. "Immigrants, wages and obesity: the weight of the evidence," Chapters,in: International Handbook on the Economics of Migration, chapter 13, pages 242-256 Edward Elgar Publishing.
    13. Sonia Oreffice & Climent Quintana-Domeque, 2012. "Fat spouses and hours of work: are body and Pareto weights correlated?," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 1(1), pages 1-21, December.
    14. Pagan, Ricardo & Haro, Carmen Ordóñez de & Sánchez, Carlos Rivas, 2016. "Obesity, job satisfaction and disability at older ages in Europe," Economics & Human Biology, Elsevier, vol. 20(C), pages 42-54.
    15. repec:eee:ehbiol:v:27:y:2017:i:pa:p:154-166 is not listed on IDEAS
    16. Pinkston, Joshua C., 2017. "The dynamic effects of obesity on the wages of young workers," Economics & Human Biology, Elsevier, vol. 27(PA), pages 154-166.
    17. repec:eee:ehbiol:v:26:y:2017:i:c:p:112-125 is not listed on IDEAS
    18. Averett, Susan L. & Argys, Laura M. & Kohn, Jennifer L., 2012. "Immigration, Obesity and Labor Market Outcomes in the UK," IZA Discussion Papers 6454, Institute for the Study of Labor (IZA).
    19. repec:eee:jhecon:v:57:y:2018:i:c:p:31-44 is not listed on IDEAS
    20. repec:eee:jhecon:v:57:y:2018:i:c:p:113-130 is not listed on IDEAS
    21. Oreffice, Sonia & Quintana-Domeque, Climent, 2010. "Anthropometry and socioeconomics among couples: Evidence in the United States," Economics & Human Biology, Elsevier, vol. 8(3), pages 373-384, December.
    22. Oreffice, Sonia & Quintana-Domeque, Climent, 2016. "Beauty, body size and wages: Evidence from a unique data set," Economics & Human Biology, Elsevier, vol. 22(C), pages 24-34.
    23. Courtemanche, Charles & Tchernis, Rusty & Ukert, Benjamin, 2018. "The effect of smoking on obesity: Evidence from a randomized trial," Journal of Health Economics, Elsevier, vol. 57(C), pages 31-44.

    More about this item

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior

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