The Economic Consequences of the Obese

The private and social costs of obesity have many causes, but their consequences can be grimly predicted with rough accuracy. Among the most devastating is the increased incidence of diabetes, of which 60 percent can be directly attributed to weight gain. There are now about a billion people worldwide who are overweight or obese, compared to 850 million who are chronically underweight. It is estimated that the number of people worldwide with diabetes will increase from 175 million in 2000 to 353 million in 2030, with India and China together accounting for 24 percent of the 2050 total. Obesity and its economic costs are borne on three levels. At an individual level, obesity imposes costs by limiting personal opportunity in many ways, some of which can be quantified and some of which cannot. In the workplace (assuming the obese are employed, which they may not be, due in part to their condition), costs are borne by employers due to lost productivity, absences, underperformance, and higher insurance premia which in the aggregate are quite large. Finally, obesity affects expenditures by local, state and national governments, where programs compensate for or cover some of the private and workforce costs of illness and unemployment.