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Obesity, Wages, And The Labor Market

1731 words - 7 pages

The recent obesity epidemic in the United States has wide-ranging implications, and as more literature further validates this phenomenon, we can observe obesity’s real effects on the nation’s level of health and labor market outcomes. Economically, obesity drains valuable resources from the nation’s healthcare budget, decreases worker productivity through an increased number of missed work days, and forces employers to spend more on their health care plans for overweight employees. These factors prove that obesity forces taxpayers to forgo valuable income and consumption in order to subsidize higher medical costs and treatments for the obese. According to Baum and Ford, “currently about one in three [Americans] are overweight and one in five obese” (2004, p. 885). These statistics are worrisome to economists and employers alike, and they warn us that the current rates are unsustainable. The exorbitant costs of healthcare convey serious financial consequences. According to Barkin, Heerman, Warren and Rennhoff, “the lifetime medical expenditure for an obese 20 year old ranges from $5,340 to $29,460, increasing proportionally with a rising Body Mass Index (BMI). The United States as a whole spent $78.5 billion in 2003 on health issues directly related to obesity, accounting for almost 10% of the national healthcare budget” (2010, p. 240). Graphically, this is seen in Figure 1: Finkelstein, Fiebelkorn, and Wang’s research shows that with increasing BMI, there is a strong increase in the amount of medical expenditures. This paper will compare modern literature on the obesity epidemic through an economic perspective, and discuss the varying effects obesity has on the labor market and occupational wages.
The major argument found in modern literature on the impact of obesity and wages maintains that obesity itself lowers wages. It should be noted that for each piece of literature this paper compares, the overwhelming majority of the results found that obese women earn significantly less than their male counterparts. According to Charles Baum and William Ford, men’s wages are unaffected by their weight, mainly due to “males’ greater occupational mobility [that] offsets potential wage penalties due to obesity” (2004, p. 886). John Cawley published extensive research on the wage gap across genders and racial groups. He writes, “For white females ordinary least squares estimates indicate that a difference in weight of two standard deviations (roughly 64 pounds) is associated with a difference in wages of 9%. This difference in wages is equivalent in absolute value to the wage effect of roughly 1.5 years of education or 3 years of work experience” (2004, p. 468). Obese women face a wage penalty for their physical appearance, and according to Ronald DeBeaumont, women in client-facing roles or sales positions face the highest wage penalty.
For a number of reasons, obesity-related health issues and the physical appearance associated with obesity tend to...

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