Returns to Education and Smoking : Evidence from Germany
Looking at smoking-behavior it can be shown that there are differences concerning the time-preference-rate. Therefore this has an effect on the optimal schooling decision in the way that we appear a lower average human capital level for smokers. According to a higher time-preference-rate additionally we suppose a higher return to education for smokers who go further on education. With our empirical findings we can confirm the presumptions. We use interactions-terms to regress the average rate of return with IV. Therefore we obtain that smokers have a significantly higher average return to education than non-smokers.
|Date of creation:||Sep 2011|
|Date of revision:|
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Web page: http://www.uni-potsdam.de/fakultaeten/wiso.html
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