Using National Longitudinal Survey of Youth data, the authors examine the effect of smoking on wages. Their analysis controls for differences in individual charaeteristics that may be correlated with both smoking and wages, including unobservable person-specific characteristics that are constant over time, and unobservable characteristics that are constant within a family. Estimates from alternative specifications indicate that smoking reduced wages by roughly 4–8%. Empirical tests of three potential explanations for this finding yield no conclusive results.
Get full access to this article
View all access options for this article.
References
1.
AshenfelterOrley, and ZimmermanDavid J.. Forthcoming. “Estimates of the Returns to Schooling from Sibling Data: Fathers, Sons, and Brothers.”Review of Economics and Statistics.
2.
AverettSusan, and KorenmanSanders. 1993. “The Economic Reality of The Beauty Myth.” National Bureau of Economic Research Working Paper No. 4521.
3.
BeckerGary S.GrossmanMichael, and MurphyKevin M.. 1994. “An Empirical Analysis of Cigarette Addiction.”American Economic Review, Vol. 84, No. 3 (June), pp. 396–418.
4.
BeckerGary S., and MurphyKevin M.. 1988. “A Theory of Rational Addiction.”Journal of Political Economy, Vol. 96, No. 4 (August), pp. 675–701.
5.
BergerMark C., and LeighJ. Paul. 1988. “The Effect of Alcohol Use on Wages.”Applied Economics, Vol. 20, No. 4 (October), pp. 1343–51.
6.
BerteraRobert L.1991. “The Effects of Behavioral Risks on Absenteeism and Health-Care Costs in the Workplace.”Journal of Occupational Medicine, Vol. 33, No. 11 (November), pp. 1119–23.
7.
BlackburnM. L., and NeumarkD.1993. “Omitted-Ability Bias and the Increase in the Return to Schooling.”Journal of Labor Economics, Vol. 11, No. 3 (July), pp. 521–44.
8.
BlakeG. H.AbellT. D., and StanleyW. G.. 1988. “Cigarette Smoking and Upper Respiratory Infection Among Recruits in Basic Combat Training.”Annals of Internal Medicine, Vol. 109, No. 3 (August), pp. 198–202.
9.
ConwayT. L., and CronanT. A.. 1992. “Smoking, Exercise, and Physical Fitness.”Preventive Medicine, Vol. 21, No. 6 (November), pp. 723–34.
10.
EvansWilliam N., and MontgomeryEdward. 1994. “Education and Health: Where There's Smoke There's an Instrument.” National Bureau of Economic Research Working Paper No. 4949.
11.
GillAndrew M., and MichaelsRobert J.. 1992. “Does Drug Use Lower Wages?”Industrial and Labor Relations Review, Vol. 45, No. 3 (April), pp. 419–34.
12.
GruberJonathan. 1994. “The Incidence of Mandated Maternity Benefits.”American Economic Review, Vol. 84, No. 3 (June), pp. 622–41.
13.
HeckmanJames J.1979. “Sample Selection Bias as a Specification Error.”Econometrica, Vol. 47, pp. 153–61.
14.
HoadN. A., and ClayD. N.. 1992. “Smoking Impairs the Response to a Physical Training Regime: A Study of Officer Cadets.”Journal of the Royal Army Medical Corps, Vol. 238, No. 3 (October), pp. 115–17.
15.
HodgsonT. A.1991. “Cigarette Smoking and Lifetime Medical Expenditures.”Milbank Quarterly, Vol. 70, No. 1, pp. 81–125.
16.
KaestnerRobert. 1991. “The Effect of Illicit Drug Use on the Wages of Young Adults.”Journal of Labor Economics, Vol. 9, No. 4 (October), pp. 381–412.
17.
KeelerTheodoreHuTeh-WeiBarnettPaul, and ManningWillard. 1993. “Taxation, Regulation, and Addiction: A Demand Function for Cigarettes Based on Time-Series Evidence.”Journal of Health Economics, Vol. 12, No. 1, pp. 1–18.
18.
KenkelDonald S., and RibarDavid C.. 1994. “Alcohol Consumption and Young Adults' Socioeconomic Status.”Brookings Papers on Economic Activity: Microeconomics, pp. 119–75.
19.
KristeinMarvin M.1983. “How Much can Business Expect to Profit from Smoking Cessation?”Preventive Medicine, Vol. 12, pp. 358–81.
20.
LeighJ. Paul, and BergerMark C.. 1989. “Effects of Smoking and Being Overweight on Current Earnings.”American Journal of Preventive Medicine, Vol. 5, No. 1, pp. 8–14.
21.
LevinePhillip B.GustafsonTara A., and VelenchikAnn D.. 1995. “More Bad News for Smokers? The Effects of Cigarette Smoking on Labor Market Outcomes.” NBER Working Paper 5270.
22.
LevyFrank, and MurnaneRichard J.. 1992. “U.S. Earnings Levels and Earnings Inequality: A Review of Recent Trends and Proposed Explanations.”Journal of Economic Literature, Vol. 30, No. 3 (September), pp. 1,333–1,381.
23.
LewitEugene M., and CoateDouglas. 1992. “The Potential for Using Excise Taxes to Reduce Smoking.”Journal of Health Economics, Vol. 1, No. 2, pp. 121–45.
24.
MullahyJohn, and SindelarJody L.. 1993. “Alcoholism, Work, and Income.”Journal of Labor Economics, Vol. 11, No. 3 (July), pp. 494–520.
25.
MullahyJohn, and SindelarJody L.1995. “Employment, Unemployment, and Problem Drinking.” National Bureau of Economic Research Working Paper No. 5123.
26.
National Center for Health Statistics. 1995. Health, United States 1994. Hyattsville, Md.: Public Health Service.
27.
RegisterCharles A., and WilliamsDonald R.. 1992. “Labor Market Effects of Marijuana and Cocaine Use Among Young Men.”Industrial and Labor Relations Review, Vol. 45, No. 3 (April), pp. 435–48.
28.
StaigerDouglas, and StockJames H.. 1994. “Instrumental Variables Regression with Weak Instruments.” National Bureau of Economic Research Technical Working Paper No. 151.
29.
WassermanJeffreyManningWillardNewhouseJoseph, and WinklerJohn. 1991. “The Effects of Excise Taxes and Regulations on Cigarette Smoking.”Journal of Health Economics, Vol. 10, No. 1, pp. 43–64.
30.
WillisRobert J.1986. “Wage Determinants: A Survey and Reinterpretation of Human Capital Earnings Functions.” In AshenfelterOrley and LayardRichard, eds., Handbook of Labor Economics, Vol. 1. Amsterdam: North Holland.
