Exploring the Effect of BMI on Wages in Emerging Countries: A Case Study of Mexico

Type Working Paper
Title Exploring the Effect of BMI on Wages in Emerging Countries: A Case Study of Mexico
Author(s)
Publication (Day/Month/Year) 2017
URL https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2970954
Abstract
The effects of bodyweight on wages seem to be closely linked to the level of development of the country concerned. In rich countries, overweight and obese workers usually seem to be penalised, whereas in the poorest societies the fattest tend to earn more. However, in several emerging economies such as Mexico, the nature of the effect is complex and remains unknown. Given a complex nutritional situation where hunger and obesity coexist, the literature suggests a quadratic relationship in these countries. However, the considerable variation in nutritional situations between emerging countries might lead to different effects of body-mass on wages. The main objective of this study is therefore to explore the impact of body-mass index (BMI) on hourly wages in an emerging country with very high obesity prevalence, such as Mexico. We use panel data from the Mexican Family Life Survey and perform a bootstrapped three-step parametric model, based on an expanded Mincer earning function, to control for potential sample selection bias and endogeneity problems. Then, we test the robustness of results from the previous parametric model implementing a bootstrapped three-step semi-parametric model. Globally, our results show a linear and positive effect of BMI on hourly wages in Mexico. Nonetheless, the effect could depend on the area (rural/urban) and the skill level of employment. While the effect remains positive in low- and middle-skilled employment, it becomes negative for high-skilled employees. Furthermore, the assumption of a U-inverted relationship between BMI and wages can be accepted in the rural context only. These area- and employment-specific differences suggest that sociocultural factors particularly influence the impact of BMI on wages. Our findings also highlight the importance of the area nutritional situation in the social process of weight perception, at least in emerging countries such as Mexico.

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