Abstract:
Health is linked to income in various ways. In this study we try to quantify the effects of differences in health and appearances on annual income. Starting with a classical Mincer-equation for income we include health and anthropometric characteristics in order to assess the hypothesis. We also decompose the income-differentials using Oaxaca-Blinder-decomposition. Using data from the North-Trøndelag health survey we have a wide range of self-reported health-indicators as well as objective measures of anthropometric features. Different health-proxies, both somatic and mental, obesity and height are all significant factors for income using a sample of full-time employed individuals, but the effects are driven mainly by selection into employment. Taking both selection bias and potential endogeneity into account the effects of health on income are weak at best. Altogether the results do not indicate that variations in health are important to observed income-differences in Norway.