The Earning Losses of Smokers

Moiz Bhai

IZA Journal of Labor Economics, 2020, vol. 9, issue 1, 21

Abstract: Using within-family variation from twins and siblings, I find that smokers earn approximately 16% less than nonsmokers. Possible explanations for this earning difference are addiction-related productivity declines and earning reductions from higher health insurance costs. To investigate further, I use variation in the provision of employer-supplied health insurance (ESHI) to examine the mechanism of whether the addiction or insurance component has a larger influence on earnings. While I generally observe a larger earning penalty for smokers with ESHI than smokers without ESHI, the earning difference is statistically indistinguishable from zero.

Keywords: twins; compensating differentials; smoking; incidence of smoking; employer-supplied health insurance (search for similar items in EconPapers)
JEL-codes: I12 I13 J31 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:izajle:v:9:y:2020:i:1:p:21:n:7

DOI: 10.2478/izajole-2020-0001

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