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The economics of obesity - One big problem

2014-10-08 07:56:33

Oct 7th 2014, 14:39 by C.W. | LONDON

BEING obese is the same as not having an undergraduate degree. That s the

bizarre message from a new paper that looks at the economic fortunes of Swedish

men who enlisted in compulsory military service in the 1980s and 1990s. They

show that men who are obese aged 18 grow up to earn 16% less than their peers

of a normal weight. Even people who were overweight at 18 that is, with a

body-mass index from 25 to 30 see significantly lower wages as an adult.

At first glance, a sceptic might be unconvinced by the results. After all, in

many countries the poorest people tend to be the fattest. One study found that

Americans who live in the most poverty-dense counties are those most prone to

obesity. If obese people tend to come from impoverished backgrounds, then we

might expect them to have lower earnings as an adult.

But the authors get around this problem by mainly focusing on brothers. Every

person included in their final sample which is 150,000 people strong has at

least one male sibling also in that sample. That allows the economists to use

fixed-effects , a statistical technique that accounts for family

characteristics (such as poverty). They also include important family

characteristics like the parents' income. All this statistical trickery allows

the economists to isolate the effect of obesity on earnings.

So what does explain the obesity penalty ? They reckon that discrimination in

the labour market is not that important. Neither is health. Instead they

emphasise what psychologists call noncognitive factors motivation, popularity

and the like. Having well-developed noncognitive factors is associated with

success in the labour market. The authors argue that obese children pick up

fewer noncognitive skills they are less likely, say, to be members of sports

teams or they may face discrimination from teachers.

And how did the authors calculate their wacky factoid? An additional year of

schooling in Sweden results in a 6% boost to earnings. The obesity penalty of

16% thus corresponds to almost three years of education the same as a

university bachelor s degree.