Labour Market, Obesity and Public Policy Considerations

This paper attempts to investigate the relation among wages, unemployment and obesity and to identify public policies to address the problem of over-weightness. To this purpose, a simple search and matching model of labour market is developed. Our framework tries to capture the relationship between obesity and employment/unemployment by assuming that the fraction of obese workers is a function of the ratio of vacant jobs to unemployment (labour market tightness). We argue that if obesity is positively related with employment, then social optimality dictates the imposition of a lump-sum tax on all individuals. In the opposite case a subsidy should be given.