Examining the relationship between obesity and wages: Empirical evidence from Taiwan

Obesity is a debilitating health condition that increases the risk of premature deaths and the onset of certain diseases, all of which result in extensive medical costs and impede both well-being and the quality of life. Obesity not only poses a threat to health, but it may also become a burden to individuals and society, in particular resulting in indirect economic losses in the labor market. The negative health, economic, and social consequences of obesity have attracted considerable attention by researchers and public health policy makers. While most of the existing literature is for the US and European countries, there is relatively limited evidence on the impact of higher weight on earnings in Asian countries. Given the fact that approximately one-third of the adult population is classified as overweight or obese and its leading position in obesity prevalence among Asian countries, Taiwan is an economy for the Asian area of particular interest in which to investigate the consequences of the trend of increasing obesity rates for the labor market. The purpose of this paper is to examine the relationship between obesity and wages in Taiwan. This paper uses a two-stage instrumental variable approach to estimate the relationship between the BMI and wages. The data used in this study are obtained from the 2008 Panel Study of Family Dynamics in Taiwan. The total sample used in this empirical analysis consists of 1,241 individuals whose ages ranged from 33 to 65 in 2008. The results of this study show that excess bodyweight has a harmful effect on an individual’s wages. The most important finding of this empirical study is to provide evidence that individuals with excess bodyweight are paid much less than their normal weight counterparts, in particular for female workers and those who are aged 50 and above. Being overweight and obese also penalizes the wages of those who are engaged in the managerial, sales, and services occupations. The public policy implications from the findings of this study are that efforts should be made not only to promote the importance of appropriate healthy diet habits to the public and encourage regular exercise, thereby helping reduce the negative impacts of obesity on physical and mental health, while concomitantly considering the impacts of obesity on the labour market and overall economic development. This empirical analysis provides evidence of the effect of bodyweight on wages in an Asian country, which can fill the gap with those prior studies that are mostly based on data from developed western countries.