Jay Bhattacharya and Kate Bundorf of Stanford University have found evidence that people who are obese and who work for firms that provide health insurance receive lower wages than workers 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.
a. Why might firms that provide workers with health insurance pay a lower wage to obese workers than to workers who are not obese?
b. Is Bhattacharya and Bundorf’s finding relevant to the question of whether health insurance provides people with an incentive to become obese? Briefly explain.
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