Q: “Rising wages- has that impacted obesity?” (29:55)

A: “This is interesting. The World Health organization has claimed, worldwide at least, that rising incomes have promoted obesity, but I think they’re more thinking of developing countries more than economically developed countries like ours. Even in economically developed countries like ours, you could see it going either way. If you take somebody and you double their income, on the one hand, with more income they can buy more of everything, and that definitely includes food and going out to restaurants. The percent of calories consumed away from home has in fact gone up.

While higher income may lead to you buy more of everything, including eating out more and buying more food for the house, another effect would be though, in addition to wanting to eat more food, the higher income allows you to buy more luxuries. One luxury that people might desire is their appearance. If you look on TV and you see these Real Housewives shows, these are families with a lot of disposable income that clearly direct a lot of time and energy towards their appearance. And so they might, in fact, start going to the gym more, hire a personal trainer, focus more on organic, natural, locally sourced foods. So it’s really kind of ambiguous what happens with income.

One thing we did to try and answer this is we looked for a natural experiment, something that affected people’s income that wouldn’t otherwise be affecting their weight except through their income. We looked at the impact of what’s called the Social Security Benefits Notch, which was literally a legislative accident.

Decades ago, U.S. social security benefits were not automatically adjusted for inflation. Instead, what Congress would do is periodically raise them so they could go home and tell their constituents, “I voted to raise your social security, you should really reelect me.” Eventually they thought this was silly and they decided that they should just make this automatic and based on the consumer price index or some other measure of inflation. When they did that, they made a mistake the first time. The mistake was that certain people got doubly compensated for inflation and normally this wouldn’t have mattered, but during the 1970’s, inflation was really high. This error became really important and it led to windfall social security benefits for certain birth year cohorts of retirees.

Now Congress realized its mistake in the wake of high inflation and they corrected it for future retirees but they grandfathered in the people who were getting these windfall payments. So it’s this great natural experiment where certain birth year cohorts of retirees are getting extra money every year for the rest of their lives. So we looked at the impact of that extra money and found no impact at all on people’s weight. Nothing at all; a very precise zero.”