Gaining more, producing less: the link between an obese workforce and firm-level productivity

Abstract

PurposeThe health costs associated with obesity are increasing in developed and emerging economies. Particularly important, though remaining underexplored, is the overall impact of health risks associated with being obese and overweight on the productivity of firms in a cross-country setting. The purpose of this paper is to address these issues.Design/methodology/approachThis paper exploits the natural variation in the percentage of obese males in the population as an exogenous health risk randomly distributed across firms in each country.FindingsInvestigating this link for a sample of around 80 emerging countries, the evidence suggests a significant negative effect of health risks on productivity.Research limitations/implicationsThe identification assumptions are checked using different approaches to establish the robustness of the empirical link.Originality/valueThis study helps us understand the microlevel effects of the rising average obesity rate. This knowledge is rare in emerging economies which are facing the highest risks of obesity and cardiovascular diseases associated with it.