Economic Consequences of the Obese

Abstract

The private and social costs of obesity have many causes, and their consequences can be grimly predicted with only rough accuracy. Among the most devastating is the increased incidence of diabetes, of which 60% can be directly attributed to weight gain. There are now about one billion people worldwide who are overweight or obese, compared with 850 million who are chronically underweight. It is estimated that the number of people worldwide with diabetes will increase from 175 million in 2000 to 353 million in 2030, with India and China together accounting for 24% of the total in 2050. Obesity and its economic costs are borne on three levels. At an individual level, obesity imposes costs by limiting personal opportunity in many ways, only some of which can be quantified. In the workplace (assuming the obese are employed, which they may not be, due in part to their condition), costs are borne by employers due to lost productivity, absences, underperformance, and higher insurance premia, which in the aggregate are quite large. Finally, obesity affects expenditures by local, state, and national governments, where programs compensate for or cover some of the private and workforce costs of illness and unemployment.