Labor Market Effects of Obesity and Diabetes: Is There a Compounding Problem?

There is a well-established relationship between health outcomes and labor market outcomes. This study extends the current literature by estimating the individual and interactive effects of obesity and type 2 diabetes, two prevalent and detrimental health conditions, on wages and intensive labor supply. We draw data from the National Longitudinal Survey of Youth 1979 and account for potential sources of bias using panel and propensity score techniques. Results suggest that obesity and type 2 diabetes are associated with negative labor market outcomes, driven by associated health factors. Further results, from a combination of individual fixed effects and propensity score matching, suggest the interaction of type 2 diabetes and obesity yields larger labor market penalties than either condition estimated in isolation.