Labor Market Outcomes of Obesity among the Near-Elderly

The objective of this study is to examine the effect of obesity labor market outcomes among the near-elderly population in the U.S.. Previous studies on the labor market outcomes of obesity mostly focused on younger population and may not fully capture the adverse effects of obesity that are developed after middle-age. This study contributes to the existing literature by focusing on the specific near-elderly population. Several aspects of labor market outcomes are examined, in particular, retirement, wage and work absenteeism. This study employed the panel data of 1992 through 2004 surveys from Health and Retirement Study, a Nationally representative survey. Study sample includes over twenty thousands working males and females between age 51 and 64. I measure obesity using Body Mass Index based on self-reported weight. Logistic model is used to estimate the effect of being obese at baseline on the probability of retirement before age 64, controlling for a set of socioeconomic factors, health variables and job-related characteristics. OLS models is used to estimate the impact of obesity on hourly wage. For absenteeism, I first use logistic model to estimate the impact of obesity on the probability of missing any day due to illness among the entire working sample. Then using the sub-sample of workers who did miss any day from work, I estimate OLS models of the number of days missed due to illness. Recognizing the potential endogeneity of obesity, I applied Hausman's endogeneity test and Instrumental Variable approach. Two Stage Residual Inclusion models were estimated for each outcome variable to compare with the models that didn't adjust for endogeneity. Models are estimated for separately by gender. Estimation results suggest that obese male and female workers receive significantly lower hourly wage and lower annual earnings than their non-obese peers. Obese male and female workers are also more likely to miss some work days due to illness. In particularly, obese female workers take off a greater number of sick days than their non-obese counterparts. Although the direct effect of obesity on retirement is not significant, I observe some indirect effect of obesity on retirement through poor health status. In conclusion, obesity affects the labor market outcomes of near-elderly workers in several aspects: Obese near-elderly workers are paid less, take more sick days, and more likely to retire early due to bad health. This study can inform policy makers of the indirect cost that obesity posed on employers and individuals in terms of reduced productivity and labor participation.

Labor Force Participation

20650