The Labor Market Effects of GLP-1s: Evidence from Weight Management and Diabetes Cohorts

Christian Alemán-Pericón, Fane Groes, Veda Narasimhan, Raül Santaeulàlia-Llopis and Tetyana Surovtseva
Authors registered in the RePEc Author Service: Christian Daniel Alemán Pericón

No 1605, Working Papers from Barcelona School of Economics

Abstract: Using population-wide administrative microdata from Denmark, we provide the first comprehensive empirical evaluation contrasting the causal labor market effects of GLP-1 receptor agonists across their dual therapeutic tracks: a subsidized diabetic cohort (Ozempic) subject to public reimbursement, and a weight-management cohort (Wegovy) paying entirely out-of-pocket. Exploiting variation in individual prescription timing among eventual users, and validated by a battery of robustness checks leveraging treatment dropouts, alternative insulin baselines, and matched stacked designs, we find robust labor supply expansions that sharply differ by track. For the subsidized diabetes cohort, treatment initiation raises the probability of employment by 4.1 percentage points and quarterly hours worked by 19.5 hours. Conversely, for out-of-pocket weight-management cohorts, employment effects are flat, but the intensive labor supply expands by 29.7 hours per quarter conditional on employment. Wage effects are statistically insignificant across tracks, confirming that labor earnings gains are quantity-driven. Integrating these micro-elasticities into a public finance accounting framework, we show that price regulations shrink the standalone diabetic deficit, while weight-management cohorts generate substantial, pure income tax windfalls that naturally stabilize public health budgets.

Keywords: cost-sharing structures; diabetes; labor supply; pharmaceuticals; public health budgets; reference pricing; semaglutide; weight management (search for similar items in EconPapers)
JEL-codes: H51 I11 I18 J22 L51 L65 (search for similar items in EconPapers)
Date: 2026-10
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