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Forgone earnings from smoking : evidence for a developing country

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  • Lokshin, Michael
  • Beegle, Kathleen

Abstract

The authors estimate the economic losses related to the negative effect of smoking on wages in a context of a developing country. Using data from the 2005 Albania Living Standards Monitoring Survey, they jointly estimate a system of three equations: the smoking decision and two separate wage equations for smokers and nonsmokers. The results show that, after controlling for observed characteristics and taking into account unobserved heterogeneity in personal characteristics, smoking has a substantial negative impact on wages. On average smokers'wages are 20 percent lower than the wages of similar nonsmokers, providing strong evidence for the potential policy relevance of tobacco control initiatives for developing countries.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 4018.

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Date of creation: 01 Oct 2006
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Handle: RePEc:wbk:wbrwps:4018

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Related research

Keywords: Health Monitoring&Evaluation; Tobacco Use and Control; Alcohol and Substance Abuse; Adolescent Health; Disease Control&Prevention;

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References

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  1. M. Christopher Auld, 2005. "Smoking, Drinking, and Income," Journal of Human Resources, University of Wisconsin Press, vol. 40(2).
  2. Nigel Tomes, 1984. "The Effects of Religion and Denomination on Earnings and the Returns to Human Capital," Journal of Human Resources, University of Wisconsin Press, vol. 19(4), pages 472-488.
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Cited by:
  1. Kathrin Armbruster & Michael Beckmann & Dieter Kuhn, 2012. "Task Allocation and Corporate Performance: Is There a First-Mover Advantage?," Working papers 2012/07, Faculty of Business and Economics - University of Basel.
  2. repec:ese:iserwp:2007-31 is not listed on IDEAS
  3. Ermakov, Stepan, 2012. "The impact of smoking intensity on wages in Russia," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 25(1), pages 70-94.
  4. Michael Beckmann & Matthias Kräkel, 2011. "Internal Rent Seeking, Works Councils, and Optimal Establishment Size," Working papers 2011/14, Faculty of Business and Economics - University of Basel.

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