The Effect of Exercise on Earnings: Evidence from the NLSY

Abstract

This paper investigates whether engaging in regular exercise leads to higher earnings in the labor market. While there has been a recent surge of interest by economists on the issue of obesity, relatively little attention has been given to the economic effects of regular physical activity apart from its impact on body composition.

I find that engaging in regular exercise yields a 6 to 10% wage increase. The results also show that while even moderate exercise yields a positive earnings effect, frequent exercise generates an even larger impact. These findings are fairly robust to a variety of estimation techniques, including propensity score matching.

It is widely acknowledged that regular exercise has a positive impact on well-being. In addition to the positive impacts on heart health, weight and a variety of other medical issues, studies in the psychology and biology/medicine literature show that exercise leads to improved mental function (Hillman et al 2008), psychological condition (Folkins and Sime 1981) and higher energy levels (Puetz 2006).

All three of these traits can translate into higher earnings by raising productivity. As outlined in Lechner (2009), in addition to the direct effect (through productivity), exercise can have a positive impact on labor market outcomes by serving as a signal to potential employers that the individual is dedicated and disciplined or through social networking effects.

This paper investigates whether engaging in regular exercise leads to higher earnings in the labor market. While there has been a recent surge of interest by economists on the issue of obesity, relatively little attention has been given to the economic effects of regular physical activity apart from its impact on body composition. The only other published study (that the author is aware of) to investigate the direct labor market effects of regular physical activity finds a positive earnings effect when applying semi-parametric techniques to German data (Lechner 2009). The present paper contributes to the literature by examining whether there is a causal effect of engaging in regular exercise on labor earnings using data for the United States.

Read more of the  Preliminary Draft  of the study  http://www.csuohio.edu/class/economics/WorkingPapers/WorksPDFs/15.pdf
The Effect of Exercise on Earnings: Evidence from the NLSY
Vasilios D. Kosteas
Cleveland State University
2121 Euclid Avenue, RT 1707
Cleveland, OH 44115-2214
b.kosteas@csuohio.edu
Tel: 216-687-4526, fax: 216-687-9206  

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