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The ambiguous causal relationship between body-mass and labour income in emerging economies: The case of Mexico.

Levasseur, Pierre (2017): The ambiguous causal relationship between body-mass and labour income in emerging economies: The case of Mexico.

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Abstract

The effect of body-mass on labour outcomes seems to be closely linked to the level of development of the country concerned. In rich countries, excess weight is penalised at work, whereas in the poorest societies overweight is rewarded. These divergences indicate that this effect depends on sociocultural factors related to weight perception and stigmatisation. In the case of emerging economies, weight perception appears to be unclear given a hybrid nutritional panorama: hunger and obesity coexist. Although the literature suggests a quadratic causal relationship between body-mass and earnings in middle-income countries, these economies are quite heterogeneous in terms of the body-mass distribution. The main objective of this study is therefore to explore the impact of body-mass index (BMI) on hourly income in an emerging country with high obesity prevalence, such as Mexico. We use panel data from the Mexican Family Life Survey and perform a bootstrapped three-step parametric model, based on an expanded Mincer earning function to control for potential sample selection bias and endogeneity problems. Then, we test the robustness of results implementing a bootstrapped three-step semiparametric model. For employees, our results show a right-leaning U-inverted causal relationship between BMI and hourly wage in Mexico. In other words, while overweight is rewarded at work, obesity is significantly penalised. By contrast, for self-employed workers, we observe a linear and positive effect of BMI on earnings, at least up to a BMI of 32 kg/m². The source of stigmatisation, as well as sociocultural heterogeneity, can explain why earning penalties are higher for employers than self-employed workers. To conclude, our findings suggest that two paradoxical phenomena are occurring in emerging countries such as Mexico: (i) a social acceptance of overweight, due to past nutritional deprivations and to the growing normalisation of obesity; (ii) a social reject of obesity, due to the large diffusion and adoption of thinness ideals from Western culture.

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