Firms that provide workers with health insurance may pay a lower wage to obese workers than to workers who are not obese because the former tend to be less healthy and consequently A. more costly to insure and therefore employ due to their higher claim submission rate. B. less productive at work. C. experience higher rates of absenteeism and early retirement. D. all of the above. E. A and B only.
Firms that provide workers with health insurance may pay a lower wage to obese workers than to workers who are not obese because the former tend to be less healthy and consequently A. more costly to insure and therefore employ due to their higher claim submission rate. B. less productive at work. C. experience higher rates of absenteeism and early retirement. D. all of the above. E. A and B only.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Jay Bhattacharya and M. Kate Bundorf of Stanford University have found evidence that people who are obese and work for firms that have employer-provided health insurance receive lower wages than people working at those firms who are not obese. At firms that do not provide health insurance, obese workers do not receive lower wages than workers who are not obese.
Source: Jay Bhattacharya and M. Kate Bundorf, "The Incidence of the Health Care Costs of Obesity," Journal of Health
Economics,
Vol. 28, No. 3, May 2009, pp. 649-58.Firms that provide workers with health insurance may pay a lower wage to obese workers than to workers who are not obese because the
former
tend to be
less healthy
and consequentlymore
costly to insure and therefore employ due to their
higher
claim submission rate.less
productive at work.experience
higher
rates of absenteeism and early retirement.all of the above.
A and B only.
Regarding the question of whether health insurance provides people with an incentive to become obese, the finding of Bhattacharya and Bundorf seems
irrelevant since a multitude of other factors besides the presence of health insurance can cause obesity.
"off the wall," because it's common knowledge that obesity is a disease, like cancer.
irrelevant since correlation does not establish causation.
relevant since the link between insurance and obesity was established while holding many other variables constant.
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