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The Economics of Fitness and Wellness

Workplace Wellness Programmes

Why employers offer wellness programmes, what evidence says about their benefits, and the difference between perks and real health improvements.

Many employers offer wellness programmes: gym subsidies, health checks, step challenges and mental health support.

Why employers offer them

  • Healthier workers may be more productive and take fewer sick days.
  • Lower insurance costs.
  • Recruitment and retention.

What the evidence says

  • A large randomised study at the University of Illinois, published in 2019, found a workplace wellness programme didn’t significantly change health or productivity in the short run.
  • A similar study at BJ’s Wholesale Club found small effects on some behaviours but not on health outcomes.

Selection effect

Healthy employees are more likely to join wellness programmes. This makes programmes look successful even if they don’t cause improvements, a selection bias.

What might work better

  • Flexible hours and reasonable workloads.
  • Mental health support.
  • Active commuting facilities.

Perks and culture

Wellness perks can still improve morale, even if health effects are small.

The step challenge

A company runs a step challenge. Fit employees who already walk a lot win prizes, while less active colleagues don't participate, so overall health barely changes.

Thinking wellness programmes always improve health

Rigorous studies found small or no effects in the short run.

Key takeaways
  • Employers offer wellness programmes for productivity and retention.
  • Randomised studies found small or no short-run health effects.
  • Selection bias makes programmes look better than they are.
  • Workloads, flexibility and mental health support may matter more.
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