Big, fat paycheck: an Australian tale of wages differentials by nativity accounting for body size

Natalia C. Malancu, Universitat Pompeu Fabra

We estimate the dual effect of immigration and obesity on wages in Australia using the Household, Income and Labour Dynamics in Australia (HILDA) Survey. To our knowledge there are only two other similar attempts: Cawley et al. (2009) using U.S. data and Avarett et al. (2012) using UK data. Australia stands as unique case study given how obesity constitutes a health screening tool in the immigration process. The data allows us to employ a superior measure of obesity to BMI, specifically the waist to height ratio. Differences across nativity- English speaking versus non-English speaking country of birth- are explored in order to tease out selective acculturation processes over time. While data limitation preclude us from solidly addressing endogeneity- we attempt two popular strategies in the literature, our findings suggest that fiddling with the immigration process in order to alleviate public health concerns comes at high financial penalties at individual level.