Discussion Paper

Where There's Smoke...: The Wage Impact of Smoking

Abstract: Cigarette smokers earn significantly less than nonsmokers, but the magnitude of the smoking wage gap and the pathways by which it originates are unclear. While most research focuses on contemporaneous reasons for the wage differential, the research described in this Policy Hub article finds that decisions made early in life—about education, labor force participation, and occupation—contribute significantly to the wage penalty smokers face later, especially for men. Women are found to be judged more harshly by their current employers for their smoking behavior, and since quitting smoking doesn't entirely erase the impact of early decisions, early intervention is imperative to avoid the negative wage impacts.

Keywords: wages; smoking; dynamic system of equations; NLSY;

JEL Classification: I10; I12;


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Bibliographic Information

Provider: Federal Reserve Bank of Atlanta

Part of Series: Policy Hub*

Publication Date: 2020-10-08

Number: 2020-11