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The Earning Losses of Smokers

Author

Listed:
  • Bhai Moiz

    (Department of Economics, University of Arkansas at Little Rock, 2801 S. University Ave, Little Rock, AR72204. USA)

Abstract

Using within-family variation from twins and siblings, I find that smokers earn approximately 16% less than nonsmokers. Possible explanations for this earning difference are addiction-related productivity declines and earning reductions from higher health insurance costs. To investigate further, I use variation in the provision of employer-supplied health insurance (ESHI) to examine the mechanism of whether the addiction or insurance component has a larger influence on earnings. While I generally observe a larger earning penalty for smokers with ESHI than smokers without ESHI, the earning difference is statistically indistinguishable from zero.

Suggested Citation

  • Bhai Moiz, 2020. "The Earning Losses of Smokers," IZA Journal of Labor Economics, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 9(1), pages 1-21, March.
    • Handle: RePEc:vrs:izajle:v:9:y:2020:i:1:p:21:n:7
    DOI: 10.2478/izajole-2020-0001
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    References listed on IDEAS

    as
    1. Anger, Silke & Kvasnicka, Michael, 2010. "Does Smoking Really Harm Your Earnings so Much? Biases in Current Estimates of the Smoking Wage Penalty," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 17(6), pages 561-564.
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    More about this item

    Keywords

    twins; compensating differentials; smoking; incidence of smoking; employer-supplied health insurance;
    All these keywords.

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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