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Title:Biases in estimates of the smoking wage penalty PDF Logo
Authors:Anger, Silke
Kvasnicka, Michael
Issue Date:2006
Series/Report no.:SFB 649 discussion paper 2006,089
Abstract:Empirical studies on the earnings effects of tobacco use have found significant wage penalties attached to smoking. We produce evidence that suggests that these estimates are significantly upward biased. The bias arises from a general failure in the literature to control for the past smoking behavior of individuals. 2SLS earnings estimates show that the smoking wage penalty is reduced by as much as a third, if past smoking of individuals is controlled for. Our results also point to significant wage gains for individuals that quit smoking, a finding that is of substantial interest, given the lack of evidence on the earnings effects of smoking cessation.
Subjects:Smoking
wages
earnings regressions
JEL:J31
I19
C51
Document Type:Working Paper
Appears in Collections:SFB 649 Discussion Papers, HU Berlin

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