NBER

Julie L. Hotchkiss

Federal Reserve Bank of Atlanta
Research Department
1000 Peachtree St. NE
Atlanta, GA 30309-4470

E-Mail: EmailAddress: hidden: you can email any NBER-related person as first underscore last at nber dot org
Institutional Affiliations: Federal Reserve Bank of Atlanta and Georgia State University

NBER Working Papers and Publications

July 2020The Dynamics of the Smoking Wage Penalty
with Michael E. Darden, M. Melinda Pitts: w27567
Cigarette smokers earn significantly less than nonsmokers, but the magnitude of the smoking wage gap and the pathways by which it originates are unclear. Proposed mechanisms often focus on spot differences in employee productivity or employer preferences, neglecting the dynamic nature of human capital development and addiction. In this paper, we formulate a dynamic model of young workers as they transition from schooling to the labor market, a period in which the lifetime trajectory of wages is being developed. We estimate the model with data from the National Longitudinal Survey of Youth, 1997 Cohort, and we simulate the model under counterfactual scenarios that isolate the contemporaneous effects of smoking from dynamic differences in human capital accumulation and occupational select...

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