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Title:Substance use and earnings : the case of smokers in Germany PDF Logo
Authors:Schwarze, Johannes
Heineck, Guido
Issue Date:2003
Series/Report no.:IZA Discussion paper series 743
Abstract:This paper examines the effect of smoking behavior on earnings. Using data from the GSOEP, both cross-sectional and longitudinal models are estimated separately for males and females. Results for the cross-sectional models confirm prior analyses inasmuch as smoking has a negative effect on earnings for males. However, applying fixed-effects estimation, this effect is found to be inverted for men aged 25 to 35 years compared to their non-smoking counterparts. That is, controlling for unobservable individual heterogeneity, the result implies that male smokers are individuals with higher time preference rates. At the early stage of the age-earnings course higher earnings are therefore found for smokers because young male non-smokers only are about to start off their occupational career. Women?s earnings, however, are not affected by smoking behavior.
Subjects:smoking
earnings regressions
JEL:I12
J30
J70
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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