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Forgone earnings from smoking : evidence for a developing country

Author

Listed:
  • Lokshin, Michael
  • Beegle, Kathleen

Abstract

The authors estimate the economic losses related to the negative effect of smoking on wages in a context of a developing country. Using data from the 2005 Albania Living Standards Monitoring Survey, they jointly estimate a system of three equations: the smoking decision and two separate wage equations for smokers and nonsmokers. The results show that, after controlling for observed characteristics and taking into account unobserved heterogeneity in personal characteristics, smoking has a substantial negative impact on wages. On average smokers'wages are 20 percent lower than the wages of similar nonsmokers, providing strong evidence for the potential policy relevance of tobacco control initiatives for developing countries.

Suggested Citation

  • Lokshin, Michael & Beegle, Kathleen, 2006. "Forgone earnings from smoking : evidence for a developing country," Policy Research Working Paper Series 4018, The World Bank.
  • Handle: RePEc:wbk:wbrwps:4018
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    References listed on IDEAS

    as
    1. Nigel Tomes, 1984. "The Effects of Religion and Denomination on Earnings and the Returns to Human Capital," Journal of Human Resources, University of Wisconsin Press, vol. 19(4), pages 472-488.
    2. M. Christopher Auld, 2005. "Smoking, Drinking, and Income," Journal of Human Resources, University of Wisconsin Press, vol. 40(2).
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    Cited by:

    1. Beckmann, Michael & Kräkel, Matthias, 2012. "Internal rent seeking, works councils, and optimal establishment size," European Economic Review, Elsevier, vol. 56(4), pages 711-726.
    2. Brune, Lasse F., 2007. "The smoker's wage penalty puzzle: evidence from Britain," ISER Working Paper Series 2007-31, Institute for Social and Economic Research.
    3. Armbruster, Kathrin & Beckmann, Michael & Kuhn, Dieter, 2012. "Task Allocation and Corporate Performance : is There a First-Mover Advantage?," Working papers 2012/07, Faculty of Business and Economics - University of Basel.
    4. Ermakov, Stepan, 2012. "The impact of smoking intensity on wages in Russia," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 25(1), pages 70-94.

    More about this item

    Keywords

    Health Monitoring&Evaluation; Tobacco Use and Control; Alcohol and Substance Abuse; Adolescent Health; Disease Control&Prevention;

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