Do employers discriminate against obese employees? Evidence from individuals who are simultaneously self-employed and working for an employer

Abstract

We test whether the lower wages of obese employees result from employer discrimination using a novel empirical strategy. Using data from two nationally representative surveys from the US, we analyze the wages of individuals who are simultaneously self-employed and working for an employer. While lower productivity and customer discrimination against obese individuals may affect wages in both types of jobs, employer discrimination cannot affect the wages of solo entrepreneurs. Our estimates suggest that, even after controlling for productivity (proxied by their concurrent wage in self-employment), white women (men) who are obese earn 11.4% (9.7%) less than their healthy-weight counterparts in their paid employment jobs. We also find that white women (but not men) who are overweight earn 9.1% less than their healthy-weight counterparts. We do not find any evidence of significant bodyweight discrimination among black and Hispanic workers. These results suggest that white workers, especially white women, are likely to face bodyweight discrimination in their workplaces. We report the results for a series of robustness checks to rule out alternative explanations, such as reverse causality, differences in healthcare costs, and occupation-specific customer discrimination.