The smoking wage penality in the United Kingdom: Regression and matching evidence from the British Household Survey Panel
AbstractThis paper considers the impact of tobacco consumption on wages in the UK using data from fifteen waves of the British Household Panel Survey. Considering both overall smoker status as well as the number of cigarettes consumed, we provide estimates for the smoking wage penalty using standard regression methods, including panel estimators for fixed eects and panel instrumental variable estimators. Furthermore, we analyse the impact of stopping and starting to smoke relative to permanent smokers and non-smokers by Mahalanobis-matching. In the cross-section, we find a rather large wage penalty for smokers of about 4%. However, panel estimator and IV results show relatively few support for hypotheses linking the smoking wage penalty to either lower productivity of smokers, be it health related or not, or discrimination. Matching results suggest that starting or stopping to smoke does not aect later earnings relative to remaining either smoker or non-smoker.
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Bibliographic InfoPaper provided by University of Lüneburg, Institute of Economics in its series Working Paper Series in Economics with number 96.
Length: 33 pages
Date of creation: Aug 2008
Date of revision:
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Smoking wage penalty; United Kingdom; discrimination;
Find related papers by JEL classification:
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
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