The incidence of the healthcare costs of smoking
Smokers 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.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jonathan Gruber, 2010. "The Tax Exclusion for Employer-Sponsored Health Insurance," NBER Working Papers 15766, National Bureau of Economic Research, Inc.
- Bhattacharya, Jay & Bundorf, M. Kate, 2009. "The incidence of the healthcare costs of obesity," Journal of Health Economics, Elsevier, vol. 28(3), pages 649-658, May.
- Miller, Vincent P. & Ernst, Carla & Collin, François, 1999. "Smoking-attributable medical care costs in the USA," Social Science & Medicine, Elsevier, vol. 48(3), pages 375-391, February.
- Irina B. Grafova & Frank P. Stafford, 2009. "The Wage Effects of Personal Smoking History," ILR Review, Cornell University, ILR School, vol. 62(3), pages 381-393, April.
- van Ours, Jan C., 2004. "A pint a day raises a man's pay; but smoking blows that gain away," Journal of Health Economics, Elsevier, vol. 23(5), pages 863-886, September.
- M. Christopher Auld, 2005. "Smoking, Drinking, and Income," Journal of Human Resources, University of Wisconsin Press, vol. 40(2).
- van Ours, J.C., 2004. "A pint a day raises a man's pay, but smoking blows that gain away," Other publications TiSEM 1447748f-5e9e-4064-84f2-1, Tilburg University, School of Economics and Management.
- Phillip B. Levine & Tara A. Gustafson & Ann D. Velenchik, 1997. "More Bad News for Smokers? The Effects of Cigarette Smoking on Wages," ILR Review, Cornell University, ILR School, vol. 50(3), pages 493-509, April.
- W. Kip Viscusi & Joni Hersch, 2001. "Cigarette Smokers As Job Risk Takers," The Review of Economics and Statistics, MIT Press, vol. 83(2), pages 269-280, May.
When requesting a correction, please mention this item's handle: RePEc:eee:jhecon:v:30:y:2011:i:5:p:1094-1102. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If references are entirely missing, you can add them using this form.