Abstract
Purpose
Apart from obesity-related health care costs in South Africa, obesity is also seen to have far-reaching effects that seep into labour market outcomes. Using National Income Dynamics Survey (NIDS) panel data, this study aims to examine the relationship between body mass index (BMI) and employment status as well as wage levels of individuals to identify the optimal level of BMI from the labour market perspective in South Africa. Thereafter, the article uses ethnicity-backed obesity thresholds to measure the discrimination obese individuals face on the probability of becoming employed and their wages earned once employed.
Methods
The econometric analysis uses the OLS probit and tobit regression models as the starting point for analysis. However due to issues of reverse causality, the analysis thereafter utilises a system GMM model to take endogeneity into account. A further Blinder-Oaxaca decomposition technique is used to derive the discrimination component in the system GMM regressions for obese and non-obese individuals. Finallly, gender-specific analysis is undertaken to investigate whether obesity-related discrimination differs between males and females.
Results
The relationship between BMI and employment probability/wages is seen to be non-linear with increases in BMI leading to an increase in the probability of employment and wages up to a threshold beyond which this relationship becomes negative. Based on the system GMM estimation, the optimal BMI for employment probability and wage determination is identified as 30 and 27 respectively. Blinder-Oaxaca estimates show that 90% of the gap in employment status is accounted for by obesity-related discrimination. With regard to wages, obesity leads to a discrimination of 186%. Gen1der-specific Oaxaca analysis found that obese females face discrimination in employment probability of 109% compared to a negative discrimination of −184% for obese males. In determining wages, employed obese females face discrimination of around 73% whereas the discrimination endured by employed obese males is half of this, at 35%.
Conclusion
Our findings reiterate that increasingly obesity has adverse labour market implications. Obesity-based discrimination exists in South Africa and is predominantly faced by obese women entering the workplace and continues in the wage determination of both men and women.
Similar content being viewed by others
References
Adeboye B, Bermano G, Rolland C (2012) Obesity and its health impact in Africa: a systematic view. Cardiovasc J S Afr 23(9):512–521
Arellano M, Bond S (1991) Some tests of specication for panel data:Monte carlo evidence and an application to employment equations. Rev Econ Stud 58(2):277-297
Arellano M, Bover O (1995) Another look at the instrumental variables estimation of error components models. J Econ 68:29-51
Asgeirsdottir TL (2011) Obesity & Employment: the case of Iceland. University of Iceland, Department of Economics, Reykjavík
Barnett A, Kumar S (2009) Obesity & Diabetes, Second edn. John-Wiley & Sons, Southern Gate, United Kingdom
Baum C, Ford W (2004) The wage effects of obesity: a longitudinal study. Health Econ 13(9):885–899
Blinder AS (1973) Wage discrimination: reduced form and structural estimates. J Hum Resour 8:436–455
Blundell R, Bond S (1998) Initial conditions and moment restrictions in dynamic panel data models. J Econ 87:115-143
Cawley J (2004) The impact of obesity on wages. J Hum Resour 39(2):451–474
Cawley J, Han E, Norton EC (2009) Obesity and labor market outcomes among legal immigrants to the United States from developing countries. Econ Hum Biol 7(2):153–164
Dackleburg M, Gerdtham UG, Nordin M (2014) Productivity or discrimination? An economic analysis of excess-weight penalty in the Swedish labor market. Eur J Health Econ 16(6):589–601
Dasgupta P, Ray D (1986) Inequality as a determinant of malnutrition and unemployment: theory. Econ J 96(384):1011–1034
Department of Health (2015) Strategy for the Prevention & Control of obesity in South Africa 2015–2020. Department of Health, Republic of South Africa
Fairbrother KA (2009) Healthcare burden of obesity in South Africa: a reflection on the role of government. University of Witwatersrand, Johannesburg Retrieved on 2/03/2017 at: http://wiredspace.wits.ac.za/bitstream/handle/10539/8792/AmyFairbrother_ResearchReport_FinalSubmission.pdf?sequence=1
Garcia J, Quintana-Domeque C (2006) Obesity, employment, and wages in Europe. Adv Health Econ Health Serv Res 17
Greve J (2008) Obesity and labor market outcomes in Denmark. Econ Hum Biol 6(3):350–362
Harkonen J, Rasanen P, Nasi M (2011) Obesity, unemployment, and earnings. Nordic Journal of working life studies 1(2):23–38
Harper B (2000) Beauty, stature and the labour market: a British cohort study. Oxf Bull Econ Stat 62:771–801
Holtz-Eakin D, Newey W, Rosen HS (1988) Estimating vector autoregressions with panel data. Econometrica 56:1371–1395
Johansson E, Böckerman P, Kiiskinen U, Heliövaara M (2009) Obesity and labour market success in Finland: the difference between having a high BMI and being fat. Econ Hum Biol Mar 7(1):36–45
Kollamparambil U, Razak A (2016) Trends in gender wage gap and discrimination in South Africa: a comparative analysis across races. Indian Journal of Human Development 10(1):5–9
Lechtenfeld T & Zoch A (2014) Income Convergence in South Africa: Fact or Measurement Error? Stellenbosch Economic Working Papers: 10/14, South Africa
Lindeboom M, Lundborgc P, der Klaauw Bc V (2010) Assessing the impact of obesity on labor market outcomes. Econ Hum Biol 8(3):309–319
Morris S (2007) The impact of obesity on employment. Labour Econ 14(3):413–433
National Institute for Health and Clinical Excellence (NICE) (2013) Assessing body mass index and waist circumference thresholds ethnic groups in the UK (PH 46) [Online]. Available from: http://www.thehealthwell.info/node/522752 [Accessed: 1st May 2016]
Ntuk U, Gill J, Mackay D, Sattar N, Pell J (2014) Ethnic-specific obesity cutoffs for diabetes risk: cross-sectional study of 490, 288 UK biobank participants. Diabetes Care 37(9):2500–2507
Oaxaca RL (1973) Male-female wage differentials in urban labor markets. Int Econ Rev 14:693–709
Pinkston JC (2015) The dynamic effects of obesity on the wages of young workers. University of Louisville, Department of Economics, Louisville
Roodman D (2009) How to do xtabond2: an introduction to difference and system GMM in Stata. Stata J 9(1):86–136
Sargent J, Blanchflower D (1994) Obesity and stature in adolescence and earnings in young adulthood. Analysis of a British birth cohort. Arch Pediatr Adolesc Med 148(7):681–687 681–687.147
Sarlio-Lahteenkorva S, Lahelma E (1999) The association of body mass index with social and economic disadvantage in women and men. Int J of Epidemiol 28:445–449
Sen B (2014) Using the Oaxaca–Blinder decomposition as an empirical tool to analyze racial disparities in obesity. Obesity 22(7):170–1755
Some M, Rasheed N, Ohonba A (2016) The impact of obesity on employment in South Africa. Stud Econ Econ 40(2):87–104
Statistics South Africa (2014) Mid-year population estimates 2014. Statistics South Africa, Pretoria
Treasury N (2016) Taxation of sugar sweetened beverages, economics tax analysis chief directorate policy paper. Government of South Africa, Pretoria
Tugendhaft A, Hofman K (2014) Empowering healthy food and beverage choices in the workplace. Occupational Health Southern Africa 20(5)
Villar JG, Oreffice S & Quintana-Domeque C (2011) Physical Activity and Obesity in Spain: Evidence from the Spanish National Health Survey. The Economics of Sport, Health and Happiness: The Promotion of Well-being Through Sporting Activities
Wittenberg M (2011) The weight of success: the body mass index and economic well-being in South Africa. School of Economics. SALDRU and Data First University of Cape Town, Cape Town
Woolridge JM (2002) Econometric analysis of cross section and panel data. MIT Press, Cambridge (MA)
Author information
Authors and Affiliations
Corresponding author
Ethics declarations
Conflict of interest
The authors declare that there is no conflict of interest to report.
Funding
The authors acknowledge the financial support received from Economic Research Southern Africa (ERSA) for the research.
Electronic supplementary material
ESM 1
(DOCX 3044 kb)
Rights and permissions
About this article
Cite this article
Henry, J., Kollamparambil, U. Obesity-based labour market discrimination in South Africa: a dynamic panel analysis. J Public Health 25, 671–684 (2017). https://doi.org/10.1007/s10389-017-0822-3
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10389-017-0822-3