The latest foray into the economics of obesity debate comes from David Lempert of the Bureau of Labor Statistics. His new economic working paper, Women's Increasing Wage Penalties from Being Overweight and Obese, finds that overweight working women in the United States face a rising wage penalty:
This paper first utilizes annual surveys between the 1981 and 2000 waves of the National Longitudinal Survey of Youth to estimate the effect of being overweight on hourly wages. Previous studies have shown that white women are the only race-gender group for which weight has a statistically significant effect on wages. This paper finds a statistically significant continual increase in the wage penalty for overweight and obese white women followed throughout two decades.
A supporting analysis from a cross-sectional dataset, comprised of the 1987 National Medical Expenditure Survey and the 2000 and 2004 waves of the Medical Expenditure Panel Survey, also shows an increasing wage penalty. The bias against weight has increased, despite drastic increases in the rate of obesity in the United States. Alternatively, the increasing rarity of thinness has led to its rising premium.
The increasing wage penalty corresponds to current psychological research that demonstrates increased weight stigmatization in the United States. Further, as larger women age, their wages incur the effects of years of cumulative discrimination. With other factors controlled, their starting wages are lower. Throughout their working careers, these women receive less frequent raises and promotions. Therefore, we see increasing penalties in both NLSY data and the synthetic cohort constructed from NMES/MEPS data.
This paper has shown that an obese 43 year-old woman received a larger wage penalty in 2004 than she received at 20 in 1981. This paper also provides some evidence that an obese 20 year-old woman receives a larger wage penalty today than she would have in 1981 at age 20. Future literature should further explore this aspect of the story, as well as the mechanisms by which the wage disparities occur. It can be concluded that increased body weight has drastic economic consequences that have grown over time.
This is a surprising finding. One would have thought it was now the norm to be overweight in the US, and employers have become habituated to it. This paper provides strong evidence to the contrary. Comments welcome.