The effect of physical activity on long-term income

Abstract

Empirical evidence for the direct effects of physical activities on long-term labor market outcomes is limited. This state of affairs is surprising, because there is a growing amount of support on the positive effects of physical activities on health on the one hand and on the effects of good health on labor market outcomes on the other hand. We examine the long-term income effects of physical activity using a large sample (N = 5042) of male twins from Finland (Older Finnish Twin Cohort Study, 1975, 1981, 1990), matched to detailed register-based income data (Finnish Longitudinal Employer-Employee Data, 1990–2004). Our primary income measure is calculated over a fifteen-year period and it covers the prime working age of the twins that we study. We use the twin dimension of the data to control for unobservable genetic and family confounding factors. Our within-twin estimates show that being physically active has a positive impact on the long-term income. We argue that our results are not easily reconciled with the intuitive explanation of physical activity enhancing long-term income via health or more intense labor market attachment. We reason that instead, there may be various non-cognitive mechanisms at work: Physical activity can, for example, make people more persistent in the face of work-related difficulties and increase their desire to partake in competitive situations, with greater expected pecuniary rewards.