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Smoking, discount rates, and returns to education

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  • Fersterer, Josef
  • Winter-Ebmer, Rudolf

Abstract

Individual time preference determines schooling enrolment. Moreover, smoking behavior in early ages has been shown to be highly related to time preference rates. Accordingly, we use smoking at age 16 as an instrument for schooling in order to cope with ability bias in a returns to education regression. Doing this for Austrian cross-sectional data, we find no evidence of ability bias.
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Suggested Citation

  • Fersterer, Josef & Winter-Ebmer, Rudolf, 2003. "Smoking, discount rates, and returns to education," Economics of Education Review, Elsevier, vol. 22(6), pages 561-566, December.
    • Handle: RePEc:eee:ecoedu:v:22:y:2003:i:6:p:561-566
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    References listed on IDEAS

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    2. Ichino, Andrea & Winter-Ebmer, Rudolf, 1999. "Lower and upper bounds of returns to schooling: An exercise in IV estimation with different instruments," European Economic Review, Elsevier, vol. 43(4-6), pages 889-901, April.
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    11. Fersterer, Josef & Winter-Ebmer, Rudolf, 2003. "Are Austrian returns to education falling over time?," Labour Economics, Elsevier, vol. 10(1), pages 73-89, February.
    12. Phillip B. Levine & Tara A. Gustafson & Ann D. Velenchik, 1995. "More Bad News for Smokers? The Effects of Cigarette Smoking on Labor Market Outcomes," NBER Working Papers 5270, National Bureau of Economic Research, Inc.
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    More about this item

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid

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