Does Exercise Make You Rich?

Time to add to the BMA collection of academic studies on what makes people rich. Previous findings include that watching TV makes you poor, being smart does not help, and financial literacy classes reduce financial literacy.Weightlifter

Today’s entry is exercise. An economics professor at Cleveland State University has discovered that regular exercise will increase your pay. As the SmartMoney blog that brought this important finding to my attention put it, Want a 9% Raise? Hit the Gym.

Just to be clear, Professor Kosteas does not merely present a correlation between regularly working out and making more money. He argues cause and effect, that “Regular physical activity has been linked to improved mental function, psychological wellbeing and energy levels, all of which can result in increased productivity and translating into higher earnings.” (I could not find the final paper on-line for free. The quote is from a working draft.)

I never exercise. And I do not have a job. The wife hits the gym compulsively and is doing pretty well. So the correlation between pay and exercise should not surprise me. But it is not what I would have guessed.

Exercise is time consuming. And it seems to me that it would make a person too tired to do other stuff, although gym-addicts claim it gives them more energy. So I would have thought that people who work out more have that much less time to work, thus would make less money. The cliché of the high-powered professional is one who is borderline overweight and powered largely by caffeine, not a tri-athlete.

Alas, no. Turns out, people who exercise more make more money. At least that is what the data says. It has to be pointed out that both pay and exercise were self-reported in the data used for the paper. For the sake of argument, let us agree that nobody would ever lie about what they make or how often they go to the gym. Even so, taking this fact a step further, arguing that they make more money because they exercise more, is a step too far.

Kosteas makes a valiant effort, employing some esoteric statistical techniques but, in my opinion, falls short. It is a basic truth that it is very hard, and indeed usually impossible, to statistically demonstrate that the fact that A and B are correlated is due to A causing B, rather than B causing A or both being caused by C.

Sometimes you can do it logically. It would be very hard to buy the theory that lung cancer causes people to start smoking a few decades before they are diagnosed. Or that people carrying umbrellas causes rain.

This is not one of those cases. Kosteas’ theory, that exercise makes people healthy, happy, and energetic, which makes them better workers, is perfectly plausible. But there are reasonable B causes A explanations too. Perhaps higher paid people choose to spend a little less time working and more time on hobbies, such as toning up those abs.

And there are A and B both caused by C explanations. It is possible that diligent and responsible types, the ones that eat right and get enough exercise, make better employees. Or that better educated people tend to exercise more and are higher paid.

When you get down to it, the causal direction between health and exercise is not that unambiguous. It could be that the more frail among us tend not to exercise because they are not able and are also not as productive at work.

Do not get me wrong. Exercising more (and watching less TV, for that matter) is almost certainly a good idea for just about everybody, myself most certainly included. But it will not make us richer. Healthier, happier, and more energetic is good enough for me.


  • By Craig, July 5, 2012 @ 11:10 am

    Indeed, the philosopher David Hume had a very nice line of argument that we can never prove that A causes B, ever–all we get are correlations, even with simple things like physics. But we do the best we can…

    What a paper like this cries out for is a proper double-blind longitudinal study in which some randomly-selected group of non-exercising people starts a regular exercise program, and a control group does not (and we find some way to keep either group from knowing whether they are in the control–God knows how you do that). Then we come back in ten or twenty years and see what’s happened. But, you know, good luck on that one.

    Next best is a sound correleation, and a plausible theory of causation. And we seem to have that. Moderate exercise–not to the point of exhaustion or injury–does seem to reliably raise energy levels, reduce fatigue, and lessen the symptoms of depression and anxiety. All of these things would very reasonably seem to contribute to liftime earnings.

    Admittedly, none of this is proof. But what can we ever prove in the world of business? You look at the business case, run the numbers, and make the best call you can. And I think a brisk walk in the morning is very much the way to bet.

  • By jim, July 5, 2012 @ 7:55 pm

    I don’t doubt that regular exercise has a positive impact on income. Exercise improves your energy level and reduces stress. Both of those will generally make you better workers. That should result in higher income to some degree as a indirect result of the exercise. More fit people are better able to work and therefore do a better job and end up better compensated. But I think it would be anyones guess as far as how much impact on income is caused directly by exercise and how much is instead correlated to ambitious, discipline and hard working people who happen to be the types to both work hard and exercise.

  • By James Thomas, July 6, 2012 @ 2:29 pm

    I find myself to be more productive at work when I’m regularly exercising. It’s a great release of stress, and it makes me think there is a strong correlation between exercise and success.

  • By Blake, August 1, 2012 @ 12:23 am

    I think a large part of the correlation can be explained because people are just inherently shallow, the same way that there is a correlation between increased income and whiter teeth. It’s a bit optimistic to assume that people are promoted and given raises only because they are better workers.

  • By Damon Day, December 30, 2012 @ 4:30 pm

    I agree Frank,
    It is almost impossible to prove cause and effect with something like this. Perhaps the people who are focused, organized and driven to stay in shape, bring those same valuable qualities into their work environment and thus earn more money.

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  • By Kate, September 4, 2013 @ 3:21 pm

    Well, it is well known that we can be more effective and productive when we excercise. Sport does a lot of good things to us – we can release stress, we can get a proper inflation, we can be more happy with the way our body looks. I observe that it is becoming more and more popular especially to do jogging which I am totally fine with. Always good when people do sports.

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