The economic costs of obesity: evidence from China

Abstract

ABSTRACT The world is getting fat. This paper studies the economic costs of employee obesity to firms in China. Using the Work Environment Survey of Chinese Employees (WESCE), we find that the economic cost of a one-standard-deviation-increase in the employee obesity rate is about $110,000. The channel analysis suggests that obesity-induced poor health and sickness absenteeism result in productivity loss. We further find that the obesity rate among employees can be reduced if the labour union pays attention to the diet, exercise, and health of employees. One of the policy implications is that firms should set up a union-like body and require it to pay attention to employees’ health.