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Returns to Education and Smoking : Evidence from Germany

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  • Julia Reilich

Abstract

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.

Suggested Citation

  • Julia Reilich, 2011. "Returns to Education and Smoking : Evidence from Germany," Volkswirtschaftliche Diskussionsbeiträge 103, Universität Potsdam, Wirtschafts- und Sozialwissenschaftliche Fakultät.
  • Handle: RePEc:pot:vwldis:103
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