Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/20400
Authors: 
Schwarze, Johannes
Heineck, Guido
Year of Publication: 
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

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