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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.