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The smoker's wage penalty puzzle: evidence from Britain

  • Brune, Lasse F.
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    This work investigates the effect of smoking on wages for male workers using panel data from Britain for the period of 1991-2005. The strong negative correlation of smoking and wages found in a crosssectional analysis reduces substantially when accounting for unobserved individual heterogeneity using Fixed Effects estimation. I find a statistically significant wage penalty that is causally due to smoking of about -2% for smokers over those who quit. Further analysis indicates, however, that the negative effect might be underestimated when comparing with those who never started smoking or quit a long time ago.

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    File URL: https://www.iser.essex.ac.uk/research/publications/working-papers/iser/2007-31.pdf
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    Paper provided by Institute for Social and Economic Research in its series ISER Working Paper Series with number 2007-31.

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    Date of creation: 21 Dec 2007
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    Publication status: published
    Handle: RePEc:ese:iserwp:2007-31
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    1. van Ours, Jan C, 2002. "A Pint a Day Raises a Man's Pay; But Smoking Blows that Gain Away," CEPR Discussion Papers 3308, C.E.P.R. Discussion Papers.
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    18. William N. Evans & Edward Montgomery, 1994. "Education and Health: Where There's Smoke There's an Instrument," NBER Working Papers 4949, National Bureau of Economic Research, Inc.
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