Substance use and earnings : the case of smokers in Germany

Arbeitspapier

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.

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• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 743

Classification and Topics

• Classification: Wirtschaft ; Health Behavior ; Wages, Compensation, and Labor Costs: General ; Labor Discrimination: General
• Subject: smoking ; earnings regressions ; Rauchen ; Einkommen ; Lebenszyklus ; Geschlecht ; Lohn ; Schätzung ; Deutschland

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Schwarze, Johannes ; Heineck, Guido
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2003

Further information

• Handle: http://hdl.handle.net/10419/20400