The incidence of the healthcare costs of smoking
AbstractSmokers earn less than non-smokers, but much is still unknown about the source(s) of the smoker's wage gap. We build on the work of Bhattacharya and Bundorf (2009), who provide evidence that obese workers receive lower wages on account of their higher expected healthcare costs. Similarly, we find that smokers who hold employer-sponsored health insurance (ESI) receive significantly lower wages than their non-smoking peers, while smokers who are not insured through their employer endure no such wage penalty. Our results have two implications: first, the incidence of smokers’ elevated medical costs appears to be borne by smokers themselves in the form of lower wages. Second, differences in healthcare costs between smokers and non-smokers are a significant source of the smoker's wage gap.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Health Economics.
Volume (Year): 30 (2011)
Issue (Month): 5 ()
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Web page: http://www.elsevier.com/locate/inca/505560
Smoking; Wages; Employer-sponsored health insurance; Compensating differential;
Find related papers by JEL classification:
- I1 - Health, Education, and Welfare - - Health
- J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
- J7 - Labor and Demographic Economics - - Labor Discrimination
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