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The Wage Effects of Personal Smoking History

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  • Irina B. Grafova
  • Frank P. Stafford

Abstract

This study explores determinants of the wage penalty borne by smokers. The authors reconstruct individual smoking histories by pooling PSID (Panel Study of Income Dynamics) data for 1986-2001. They find no wage gap between former smokers and those who had never smoked, but statistically significant wage gaps between smokers who would continue smoking and three other groups: those who would later quit smoking, those who had quit smoking already, and those who never smoked. The wage penalty for smoking, observed in the 1986 cross-section, is largely driven by those who would continue smoking over the years 1986-2001. These results suggest that the smoker/ nonsmoker wage differential observed at any given time may be driven by a non-causal explanation rather than by smoking per se. For example, persistent smokers may be characterized by myopia that leads to reduced investment in health capital and firmspecific or other human capital.

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Bibliographic Info

Article provided by ILR Review, Cornell University, ILR School in its journal ILR Review.

Volume (Year): 62 (2009)
Issue (Month): 3 (April)
Pages: 381-393

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Handle: RePEc:ilr:articl:v:62:y:2009:i:3:p:381-393

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Cited by:
  1. Vidhura Tennekoon & Robert Rosenman, 2013. "Bias in Measuring Smoking Behavior," Working Papers 2013-10, School of Economic Sciences, Washington State University.
  2. Ermakov, Stepan, 2012. "The impact of smoking intensity on wages in Russia," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 25(1), pages 70-94.
  3. Cowan, Benjamin & Schwab, Benjamin, 2011. "The incidence of the healthcare costs of smoking," Journal of Health Economics, Elsevier, vol. 30(5), pages 1094-1102.

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