Weight and Wages: The Effect of Changing BMI Over Time

            Obesity in the United States has been growing at an alarming rate, driving up health care costs and also promoting a worsening wage penalty for overweight workers. This study explores the determinants of the wage penalty borne by overweight individuals.  To investigate this phenomenon, individual BMI history was obtained from the Panel Study of Income Dynamics for 1986-1999.  Upon examination of the cross-sectional data from 1986, there was a wage penalty observed for males who were underweight and for females who were overweight. The analysis of panel data from 1986 and 1999, however, showed that it is not the BMI in 1986 but rather the change in BMI between 1986 and 1999 that is associated with a wage penalty. Among males, a wage penalty exists for those displayed an increase or decrease in BMI from normal weight compared to those who stayed normal weight.  Among females, a wage penalty was seen for all who showed an increase in BMI. These results suggest that the overweight/normal weight wage gap is driven in part by a non-causal explanation rather than a causal explanation such as BMI.  For example, individuals with increasing BMI may have lower self-esteem, leading to less ambition to climb to higher paying jobs in the work force.