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The Earning Losses of Smokers

Moiz Bhai
Moiz Bhai
   | 30 mar 2020
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Pubblicato online: 30 mar 2020
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DOI: https://doi.org/10.2478/izajole-2020-0001
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© 2020 Moiz Bhai, published by Sciendo
This work is licensed under the Creative Commons Attribution 4.0 International License.

Figure 1

When do smokers initiate?Source: The National Survey of Midlife Development (1996).
When do smokers initiate?Source: The National Survey of Midlife Development (1996).

Figure 2

Log earnings of smokers versus nonsmokers.Source: The National Survey of Midlife Development (1996, 2006, and 2014).
Log earnings of smokers versus nonsmokers.Source: The National Survey of Midlife Development (1996, 2006, and 2014).

Does smoking or ever-smoking influence labor market participation?

Labor supply
123456
Full sampleSiblingsTwins
Panel A: full time
        Smoker-0.0010.0180.0600.0590.0540.052
        (0.011)(0.011)(0.045)(0.045)(0.056)(0.056)
        Former-smoker-0.011 (0.010)-0.004-0.033-0.032-0.035-0.034
        (0.010)(0.073)(0.074)(0.087)(0.088)
Panel B: part time
        Smoker-0.021**-0.017*-0.008-0.0080.0060.007
        (0.007)(0.007)(0.031)(0.031)(0.038)(0.038)
        Former-smoker-0.004-0.0010.0540.0550.0400.041
        (0.007)(0.007)(0.056)(0.056)(0.056)(0.056)
Covariates
        EducationNoYesNoYesNoYes
        Family FixedNoNoYesYesYesYes
        Effects (FE)

The effect of smoking on earnings by gender and schooling

CollegeNo college
MaleFemaleMaleFemale
Full sample-0.220*** (0.041)-0.134*** (0.045)-0.190*** (0.048)-0.144 (0.059)
Siblings-0.271*** (0.049)-0.239*** (0.047)-0.234*** (0.050)-0.249*** (0.048)
Twins-0.313***-0.252***-0.239***-0.115
0.0830.0700.0820.103

The annual costs of a smoker (in 2010 dollars)

Best estimateHigh rangeLow range
Excess absenteeism$517$576$179
Presenteeism4621,848462
Smoking breaks3,0774,1031,641
Excess healthcare costs2,0563,598899
Pension benefits-2960-296
Total costs5,81610,1252,885

Are smokers different than nonsmokers?

Non-smokerSmokerDifferenceP-value
MeanSTDMeanSTD
Age48.1112.1045.2410.912.87<0.01***
Female0.500.500.510.500.010.72
Employer insurance0.570.500.530.500.04<0.01***
Schooling14.602.4613.192.241.41<0.01***
High school0.960.200.890.320.07<0.01***
Some college0.720.450.520.500.20<0.01***
College graduate0.480.500.210.410.27<0.01***
Non-white0.100.300.100.310.000.98
Earnings55,22145,97241,74435,08213,477<0.01***
Log earnings10.471.1410.241.050.23<0.01***
Body mass index30.3816.5428.9916.651.390.01**
n8,9982,308

Does the earnings impact vary by age?

Age
123456
Full sampleSiblingsTwins
Panel A: old
        Smoker-0.273***-0.218***-0.283***-0.275***-0.253***-0.320***
        (0.031)(0.033)(0.095)(0.095)(0.097)(0.095)
        n5,2555,2552,4312,4311,5821,582
Panel B: young
        Smoker-0.192***-0.119***-0.051-0.049-0.096-0.090
        (0.030)(0.031)(0.117)(0.117)(0.109)(0.110)
        n3,7293,72916491,6491,1921,192
Covariates
        EducationNoYesNoYesNoYes
        Family FixedNoNoYesYesYesYes
        Effects (FE)

The effect of smoking on earnings by zygosity

Twin sample
1234
Panel A: monozygotic
        Smoker-0.322*** (0.066)-0.280*** (0.074)-0.213* (0.111)-0.213* (0.111)
Panel B: dizygotic –
        same
        Smoker-0.262*** (0.063)-0.178** (0.069)-0.198* (0.117)-0.199* (0.117)
Panel B: dizygotic – different
        Smoker-0.232*** (0.070)-0.138** (0.079)-0.223 (0.150)-0.193 (0.152)
        EducationNoYesNoYes
        Twin FixedNoNoYesYes
        Effects (FE)

Descriptive statistics for The National Survey of Midlife Development

RandomSiblingTwinAll
Age45.58 (10.53)47.33 (9.60)45.23 (10.01)45.67 (10.30)
Female0.50 (0.50)0.52 (0.50)0.53 (0.50)0.51 (0.50)
Employer insurance0.58 (0.49)0.57 (0.50)0.582 (0.49)0.583 (0.49)
(ESHI)
Schooling14.244 (2.48)14.717 (2.37)14.1 (2.40)14.351 (2.46)
High school0.94 (0.23)0.97 (0.16)0.94 (0.24)0.95 (0.22)
Some college0.67 (0.47)0.76 (0.43)0.65 (0.48)0.69 (0.46)
College graduate0.41 (0.49)0.48 (0.50)0.39 (0.49)0.43 (0.50)
Non-white0.13 (0.33)0.05 (0.22)0.07 (0.26)0.10 (0.30)
Earnings51,830 (43,073)59,041 (46,269)52,508 (42,374)54,510 (44,322)
Log earnings10.44 (1.08)10.58 (1.11)10.47 (1.08)10.50 (1.08)
Smoke0.22 (0.41)0.19 (0.39)0.21 (0.41)0.21 (0.41)
Ever smoke0.52 (0.50)0.45 (0.50)0.46 (0.50)0.49 (0.50)
n5,6155,6814,07811,306

The earnings impact of smoking by ESHI

ESHI
123456
Full sampleSiblingsTwins
Panel A: no ESHI
        Smoker-0.214***-0.159***-0.218-0.202-0.148-0.141
        (0.037)(0.039)(0.307)(0.311)(0.326)(0.327)
        n4,0294,0291,8511,8511,2531,253
Panel B: ESHI
        Smoker-0.211***-0.154***-0.282***-0.269***-0.209**-0.202**
        (0.021)(0.023)(0.104)(0.102)(0.098)(0.098)
        n4,9464,9462,2292,2291,5211,521
Panel C: DiD
        Smoker*ESHI-0.094-0.086-0.092-0.084
        (0.163)(0.147)(0.157)(0.0158)
        n4,3684,3683,0623,062
Covariates
        EducationNoYesNoYesNoYes
        Family FixedNoNoYesYesYesYes
        Effects (FE)

Does the earnings impact vary by gender?

Gender
123456
Full sampleSiblingsTwins
Panel A: men
        Smoker-0.257***-0.203***-0.222**-0.198*-0.176-0.162
        (0.026)(0.031)(0.113)(0.114)(0.124)(0.123)
        n4,4174,4171,8941,8941,2821,282
Panel B: women
        Smoker-0.219***-0.140***-0.200-0.204-0.201-0.204
        (0.036)(0.036)(0.131)(0.130)(0.141)(0.142)
        n4,5584,5582,1862,1861,4921,492
Covariates
        EducationNoYesNoYesNoYes
        Family FixedNoNoYesYesYesYes
        Effects (FE)

The earnings impact of smoking for the full sample

Full sample
1234
Panel A
        Smoker
        n = 8,975-0.235*** (0.022)-0.168*** (0.024)0.063 (0.089)0.064 (0.090)
Panel B
        Former-smoker
        n = 7,280-0.061** (0.025)-0.019 (0.025)-0.041 (0.072)-0.041 (0.072)
Covariates
        EducationYesNoYesYes
        IndividualNoYesNoYes

The earnings impact of smoking for the family sample

Family level
1234
Panel A: Siblings (n = 4,080)
        Smoker-0.270*** (0.033)-0.199*** (0.037)-0.165** (0.072)-0.156** (0.073)
        Former-smoker-0.023 (0.038)-0.024 (0.038)-0.079 (0.101)-0.062 (0.103)
Panel B: Twins (n = 2,774)
        Smoker-0.287*** (0.038)-0.182*** (0.045)-0.195** (0.078)-0.163** (0.080)
        Former-smoker0.014 (0.046)0.045 (0.047)-0.120 (0.107)-0.112 (0.112)
Covariates
        EducationNoYesNoYes
        FamilyNoNoYesYes

Testing for sample selection: singletons vs. twins

QuestionSingletonsTwinsDifferenceP-value
Mother’s education
        Has less than high school0.3600.343-0.0170.29
        Graduated high school0.4020.4030.0090.59
        Attended some college0.1290.1300.0090.45
        College graduate0.1080.1080.00020.98
        Schooling (years)11.2011.440.242**0.03
Father’s education
        Has less than high school0.4090.4080.0070.68
        Graduated high school0.3250.293-0.044**0.04
        Attended some college0.0890.100-0.0100.28
        College graduate0.1770.1910.0140.33
        Schooling (years)11.0411.11-0.0760.60
n5,6154,078
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