Where Does the Wage Penalty Bite?

42 Pages Posted: 26 May 2009 Last revised: 12 Jun 2021

See all articles by Christian Gregory

Christian Gregory

University of North Carolina (UNC) at Greensboro - Department of Economics

Christopher J. Ruhm

University of Virginia - Frank Batten School of Leadership and Public Policy; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Date Written: May 2009

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.

Suggested Citation

Gregory, Christian and Ruhm, Christopher J., Where Does the Wage Penalty Bite? (May 2009). NBER Working Paper No. w14984, Available at SSRN: https://ssrn.com/abstract=1408904

Christian Gregory

University of North Carolina (UNC) at Greensboro - Department of Economics ( email )

Greensboro, NC 27402-6165
United States

Christopher J. Ruhm (Contact Author)

University of Virginia - Frank Batten School of Leadership and Public Policy ( email )

235 McCormick Rd.
P.O. Box 400893
Charlottesville, VA 22904-4893
United States
434-924-7581 (Phone)

HOME PAGE: http://batten.virginia.edu/cruhm.html

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
17
Abstract Views
478
PlumX Metrics