IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/2234.html
   My bibliography  Save this paper

The Social Security Cost of Smoking

Author

Listed:
  • John B. Shoven
  • Jeffrey O. Sundberg
  • John P. Bunker

Abstract

Our paper is an examination of the Social Security cost of smoking from an individual point of view. It is well known that smokers have a shorter life expectancy than nonsmokers. This means that by smoking they are giving up potential Social Security benefits. We estimate this cost and consider the effects on the system as a whole. We use mortality ratios, which relate the annual death probabilities of smokers and nonsmokers, and the percentage of smokers in each age group to break down the life tables for men and women born in 1920 into the approximate life tables for smokers and nonsmokers. We then calculate expected Social Security taxes and benefits for each group, using median earnings as a base. We find that smoking costs men about $20,000 and women about $10,000 in expected net benefits. The implication of this for the system as a whole is that the prevalence of smoking has a direct effect on the financial viability of the system; every decrease in the number of smokers in society increases the system's liability. Changes in smoking behavior should be recognized as affecting the system.

Suggested Citation

  • John B. Shoven & Jeffrey O. Sundberg & John P. Bunker, 1987. "The Social Security Cost of Smoking," NBER Working Papers 2234, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:2234
    Note: PE AG
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w2234.pdf
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jim Davies, "undated". "Empirical Evidence on Human Capital Externalities," Working Papers-Department of Finance Canada 2003-11, Department of Finance Canada.
    2. Brian S. Armour & M. Melinda Pitts, 2007. "Smoking: taxing health and Social Security," Economic Review, Federal Reserve Bank of Atlanta, vol. 92(Q 3), pages 27-41.
    3. Bhattacharya, Jay & Lakdawalla, Darius, 2006. "Does Medicare benefit the poor?," Journal of Public Economics, Elsevier, vol. 90(1-2), pages 277-292, January.
    4. W. Kip Viscusi, 1995. "Cigarette Taxation and the Social Consequences of Smoking," NBER Chapters, in: Tax Policy and the Economy, Volume 9, pages 51-102, National Bureau of Economic Research, Inc.
    5. Viscusi, W. Kip, 1994. "Promoting Smokers' Welfare With Responsible Taxation," National Tax Journal, National Tax Association, vol. 47(3), pages 547-58, September.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:2234. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.