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Cigarette Smoking, Seatbelt Use, and Differences in Wage-Risk Tradeoffs


  • Joni Hersch
  • W. Kip Viscusi


Using an original data set that allowed us to measure the job risk perceived by individuals as well as smoking and seatbelt use, we found that cigarette smokers and nonseatbelt wearers receive a lower compensating differential for risk than nonsmokers and seatbelt wearers. While workers on average have an implicit value of a nonfatal lost workday injury of $48,000, this value is $81,000 for nonsmoking workers who wear seatbelts, with no evidence of a positive valuation for workers who smoke and do not wear a seatbelt. Our results imply that individual differences in other health-related activities are influential determinants of the observed wage-risk tradeoff. We also found significant compensating differentials for several nonrisk job attributes.

Suggested Citation

  • Joni Hersch & W. Kip Viscusi, 1990. "Cigarette Smoking, Seatbelt Use, and Differences in Wage-Risk Tradeoffs," Journal of Human Resources, University of Wisconsin Press, vol. 25(2), pages 202-227.
  • Handle: RePEc:uwp:jhriss:v:25:y:1990:i:2:p:202-227

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    References listed on IDEAS

    1. Davidson, Carl & Woodbury, Stephen A, 1993. "The Displacement Effect of Reemployment Bonus Programs," Journal of Labor Economics, University of Chicago Press, vol. 11(4), pages 575-605, October.
    2. Woodbury, Stephen A & Spiegelman, Robert G, 1987. "Bonuses to Workers and Employers to Reduce Unemployment: Randomized Trials in Illinois," American Economic Review, American Economic Association, vol. 77(4), pages 513-530, September.
    3. Paul T. Decker & Christopher J. L'Leary, 1995. "Evaluating Pooled Evidence from the Reemployment Bonus Experiments," Journal of Human Resources, University of Wisconsin Press, vol. 30(3), pages 534-550.
    4. Christopher J. O'Leary & Robert G. Spiegelman & Kenneth J. Kline, 1995. "Do bonus offers shorten unemployment insurance spells? results from the washington experiment," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 14(2), pages 245-269.
    5. Walter Corson & Paul T. Decker & Shari Miller Dunstan & Anne R. Gordon, "undated". "The New Jersey Unemployment Insurance Reemployment Demonstration Project: Final Evaluation Report," Mathematica Policy Research Reports a1188b0b75ad4085ab98457be, Mathematica Policy Research.
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    8. Robert B. Olsen & Marisa Kelso & Paul T. Decker & Daniel H. Klepinger, 2002. "Predicting the Exhaustion of Unemployment Compensation," Mathematica Policy Research Reports d0a9027f813a4bc397fce1190, Mathematica Policy Research.
    9. Bruce D. Meyer, 1995. "Lessons from the U.S. Unemployment Insurance Experiments," Journal of Economic Literature, American Economic Association, vol. 33(1), pages 91-131, March.
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    11. Paul T. Decker, "undated". "Work Incentives and Disincentives," Mathematica Policy Research Reports e09c4ee64359405c8a52e13c4, Mathematica Policy Research.
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