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Where There's Smoke...: The Wage Impact of Smoking

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Abstract

Cigarette smokers earn significantly less than nonsmokers, but the magnitude of the smoking wage gap and the pathways by which it originates are unclear. While most research focuses on contemporaneous reasons for the wage differential, the research described in this Policy Hub article finds that decisions made early in life—about education, labor force participation, and occupation—contribute significantly to the wage penalty smokers face later, especially for men. Women are found to be judged more harshly by their current employers for their smoking behavior, and since quitting smoking doesn't entirely erase the impact of early decisions, early intervention is imperative to avoid the negative wage impacts.

Suggested Citation

  • Steph Clampitt & Michael Darden & Julie L. Hotchkiss & M. Melinda Pitts, 2020. "Where There's Smoke...: The Wage Impact of Smoking," Policy Hub, Federal Reserve Bank of Atlanta, vol. 2020(11), pages 1-8, October.
    • Handle: RePEc:fip:a00068:99110
    DOI: 10.29338/ph2020-11
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    References listed on IDEAS

    as
    1. Julie L. Hotchkiss & M. Melinda Pitts, 2013. "Even one is too much: the economic consequences of being a smoker," FRB Atlanta Working Paper 2013-03, Federal Reserve Bank of Atlanta.
    2. Darden, Michael E. & Hotchkiss, Julie L. & Melinda Pitts, M., 2021. "The dynamics of the smoking wage penalty," Journal of Health Economics, Elsevier, vol. 79(C).
    3. Donna Gilleskie & Euna Han & Edward Norton, 2017. "Disentangling the Contemporaneous and Dynamic Effects of Human and Health Capital on Wages over the Life Cycle," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 25, pages 350-383, April.
    4. 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.
    5. M. Christopher Auld, 2005. "Smoking, Drinking, and Income," Journal of Human Resources, University of Wisconsin Press, vol. 40(2).
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    More about this item

    Keywords

    wages; smoking; dynamic system of equations; NLSY;
    All these keywords.

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior

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