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Author: Sanderson, Zachary W.
Resulting in 1 citation.
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Sanderson, Zachary W. |
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Burning a Hole in Your Pocket: the Effect of Smoking Cigarettes on Wages Master's Thesis, Department of Economics, Miami University, 2018. Also: https://etd.ohiolink.edu/pg_10?::NO:10:P10_ETD_SUBID:174792 Cohort(s): NLSY97 Publisher: OhioLINK Keyword(s): Modeling, OLS; Smoking (see Cigarette Use); Wages Permission to reprint the abstract has not been received from the publisher. This study measures the impact of smoking on wages for young adults, aged 18 to 30. Economic theory would suggest that smoking can potentially carry a negative wage effect. Smoking carries a number of health effects that have the ability to decrease a person's productivity, reducing their marginal product of labor. Economic theory states that employers set a worker's wage at the marginal product of labor. Therefore, if an individual experiences decreased productivity due to smoking, they theoretically could have a low wage. By applying OLS and first differences methods to individual and sibling pair cross-section data from the 1997 National Longitudinal Survey of Youth and following the research method outlined in Levine et al. (1997), I find that smoking cigarettes does not have a statistically significant impact on the wages of young adults. The point estimates from the OLS and first differences models lie between 6% and 11%, which match the results of previous studies that have found between a 4% and 11% negative wage effect associated with smoking. These results are confirmed by a series of robustness tests. In addition, the results of the OLS and first difference models are extremely similar to the results obtained by Levine et al., who find a statistically significant negative wage effect associated with smoking. The fact that my results line up with previous literature may suggest that smoking does carry a negative wage effect. This paper adds to the current literature by providing more research on the effects of smoking on a younger population, as well as providing more research to help validate the results of Levine et al. (1997). |
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Bibliography Citation
Sanderson, Zachary W. Burning a Hole in Your Pocket: the Effect of Smoking Cigarettes on Wages. Master's Thesis, Department of Economics, Miami University, 2018.. |