The impact of body weight on occupational mobility and career development

Harris, Matthew (2015): The impact of body weight on occupational mobility and career development.

Abstract

This paper examines the relationship between individuals' weight and their employment decisions over the life cycle. I estimate a dynamic stochastic model of individuals' annual joint decisions of occupation, hours worked, and schooling. The model allows body weight to affect non-monetary costs, switching costs, and distribution of wages for each occupation; and also allows individuals' employment decisions to affect body weight. I use conditional density estimation to formulate the distributions of wages and body weight evolution. I find that heavier individuals face higher switching costs when transitioning into white collar occupations, earn lower returns to experience in white-collar occupations, and earn lower wages in socially intensive jobs. Simulating the model with estimated parameters, decreased occupational mobility accounts for 10 percent of the obesity wage gap. While contemporaneous wage penalties for body weight are small, the cost over the life cycle is substantial. An exogenous increase in initial body mass by 20 percent leads to a 10 percent decrease in wages over the life course.

• Item Type: MPRA Paper
• Language: English
• Keywords: Labor, occupational choice, obesity, dynamic discrete choice, productivity, switching costs
• Subjects: D - Microeconomics > D9 - Intertemporal Choice > D91 - Intertemporal Household Choice ; Life Cycle Models and Saving; I - Health, Education, and Welfare > I1 - Health > I14 - Health and Inequality; J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J24 - Human Capital ; Skills ; Occupational Choice ; Labor Productivity; J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs; J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J31 - Wage Level and Structure ; Wage Differentials

References

Aguirregabiria, V. and P. Mira (2010). Dynamic discrete choice models: a survey. Journal of Econometrics 156(1), 38-67.

Altonji, J. G. and C. R. Pierret (2001). Employer learning and statistical discrimination. Quarterly Journal of Economics 116, 313-350.

Altug, S. and R. A. Miller (1998). The effect of work experience on female wages and labor supply. Review of Economic Studies 65, 45-85.

Averett, S. and S. Korenman (1996). The economic reality of the beauty myth. Journal of Human Resources 31, 304-330.

Baird, M. (2014). Occupational transitions, wage and non-wage benefits: Estimation of a dynamic model. Working Paper.

Becker, G. S. (1957). The Economics of Discrimination. The University of Chicago Press.

Bowlus, A. J. and Z. Eckstein (2002). Discrimination and skill differences in an equilibrium search model. International Economic Review 43(4), 1309-1345.

Cawley, J. (2004). The impact of obesity on wages. The Journal of Human Resources 39(2), 451-474.

Coate, S. and G. C. Loury (1993). Will affirmative-action policies eliminate negative stereotypes.American Economic Review 83(5), 1220-1240.

Colman, G. J. and D. M. Dave (2011). Exercise, physical activity and exertion over the business cycle. NBER Working Papers Series 17406, 1-38.

Courtemanche, C. (2009). Longer hours and larger waistlines? Forum for Health Economics and Policy 67, 543-564.

DeBeaumont, R. (2009). Occupational differences in the wage penalty for obese women. Journal of Socio-Economics 38, 344-349.

Eckstein, Z. and O. Lifshitz (2011). Dynamic female labor supply. Econometrica 79(6), 1675-1726.

Flabbi, L. (2010). Gender discrimination estimation in a search model with matching and bargaining. International Economic Review 51(3), 745-783.

Gayle, G.-L. and L. Golan (2012). Estimating a dynamic adverse selection model: Labor force experience and the changing gender earnings gap 1968-97. Review of Economic Studies 79(1), 227-267.

Gilleskie, D. B., E. Han, and E. C. Norton (2011). Untangling the direct and indirect effects of body mass dynamics on earnings. Working Paper.

Gilleskie, D. B. and T. A. Mroz (2004). A flexible approach for estimating the effects of covariates on health expenditures. Journal of Health Economics 23, 391-418.

Grossman, M. (1972). On the concept of health capital and the demand for health capital. Journal of Political Economy 80, 223-255.

Hamermesh, D. and J. Biddle (1994). Beauty and the labor market. The American Economic Review 84, 1174{1194.

Han, E. C., E. C. Norton, and S. C. Stearns (2009). Weight and wages: fat versus lean paychecks. Health Economics 18, 535-548.

Heckman, J. J. and B. Singer (1984). A method for minimizing the impact of distributional assumptions in econometric models for duration data. Econometrica 52(2), 271-320.

Holmstrom, B. (1999). Managerial incentive problems: A dynamic perspective. Review of Economic Studies 66, 169-182.

Johar, M. and H. Katayama (2012). Quantile regression analysis of body mass and wages. Health Economics 21, 597-611.

Kambourov, G. and I. Manovskii (2009). Occupational specificity of human capital. International Economic Review 50(1), 63-115.

Keane, M. P. and K. I. Wolpin (1994). The solution and estimation of discrete choice dynamic programming models by simulation and interpolation: Monte Carlo evidence. The Review of Economics and Statistics 76(4), 648-672.

Keane, M. P. and K. I. Wolpin (1997). The career decisions of young men. Journal of Political Economy 105, 473-522.

Keane, M. P. and K. I. Wolpin (2000). Eliminating race differences in school attainment and labor market success. Journal of Labor Economics 18(4), 614-652.

Kelly, I. R., D. M. Dave, J. L. Sindelar, and W. T. Gallo (2011). The impact of early occupational choice on health behaviors. NBER Working Papers Series 16803, 1-62.

Khwaja, A. (2010). A life cycle analysis of the effects of medicare on individual health incentives and health outcomes. Journal of Econometrics 156, 130-147.

King, G., E. Fitzhugh, D. B. Jr, S. S. JE McLaughlin, and DL Thomson, and A. Swartz (2001). Relationship of leisure-time physical activity and occupational activity to the prevalence of obesity. International Journal of Obesity 25, 606-612.

Kline, B. and J. Tobias (2008, September). The wages of bmi: Bayesian analysis of a skewed treatment-response model with non-parametric endogeneity. Journal of Applied Econometrics 23, 767-793.

Lakdawalla, D. and T. Philipson (2002). The growth of obesity and technological change: A theoretical and empirical examination. NBER Working Paper Series 8946, 1-42.

Lange, F. (2007). The speed of employer learning. Journal of Labor Economics 25(1), 1-35.

Lee, D. (2005). An estimable dynamic general equilibrium model of work, schooling and occupational choice. International Economic Review 46, 1-34.

Lee, D. and K. I. Wolpin (2006). Intersectoral labor mobility and the growth of service sector. Econometrica 47, 1-46.

Lehmann, J.-Y. K. (2013). Job assignment and promotion under statistical discrimination: Evidence from the early careers of lawyers. Working Paper.

Lindeboom, M., P. Lundborg, and B. van der Klaauw (2010). Assessing the impact of obesity on labor market outcomes. Economics and Human Biology 8(3), 309-319.

Mroz, T. A. (1999). Discrete factor approximations in simultaneous equation models: Estimating the impact of a dummy endogenous variable on a continuous outcome. Journal of Econometrics 92, 233-274.

Mroz, T. A. and D. R. Weir (2003). Stochastic dynamic optimization models with random effects in parameters: An application to age at marriage and life-cycle fertility control in France under the old regime. In T. W. Guinnane, W. A. Sundstrom, and W. C. Whatley (Eds.), History Matters: Essays on Economic Growth, Technology, and Demographic Change, pp. 483-508. Stanford Press.

Pagan, J. A. and A. Davila (1997, September). Obesity, occupational attainment and earnings. Social Science Quarterly 78, 756-770.

Pronk, N. P., B. Marinson, R. C. Kessler, A. L. Beck, G. E. Simon, and P. Wang (2004). The association between work performance and physical activity, cardio-respiratory fitness, and obesity. Journal of Occupational and Environmental Medicine 46(1), 19-25.

Ravesteijn, B., H. V. Kippersluis, and E. V. Doorslaer (2014). The wear and tear on health: What is the role of occupation. Working Paper.

Ricci, J. A. and E. Chee (2005). Lost productive time associated with excess weight in the u.s. workforce. Journal of Occupational and Environmental Medicine 47(12), 1227-1235.

Rust, J. (1997). Using randomization to break the curse of dimensionality. Econometrica 65, 487-516.

Sanders, C. E. (2010). Skill uncertainty, skill accumulation, and occupational choice. Job Market Paper.

Stinebrickner, T. R. (2001). A dynamic model of teacher labor supply? Journal of Labor Economics 19, 196-230.

Sullivan, P. (2010). A dynamic analysis of educational attainment, occupational choice, and job search. International Economic Review 51, 289-317.

Tosini, N. (2008). The socioeconomic determinants and consequences of women's body mass. UPenn working papers.

Yamaguchi, S. (2012). Tasks and heterogeneous human capital. Journal of Labor Economics 30(1), 1-53.

Yamaguchi, S. (2013). Changes in returns to task-specific skills and the gender wage gap. Working Paper.