Quit Smoking, Make More Money

In a new study, researchers at the Fed in Atlanta have claimed how smokers on average earn less than non-smokers. This confirms what economists have thought for a while, and what it contributes uniquely is how that the wage differential doesn't have to do with how many cigarettes you smoke.

Some have suggested how the associated health damages with heavier smoking habits lead to greater absenteeism from work through sick days, lowering wages because the smoker might not be such a valued employee. Another idea is that the frequent breaks taken by a heaver smoker lower their productivity, so that their lower performance means lower wages.

Hotchkiss and Pitts's findings dispute this, finding the difference between 30, 150, 300, and 600 (a pack a day) cigarettes a month was negligible on average wages.

It isn't smoking in and of itself that is the issue for them — they attribute approximately 60% of the differential to be due to endowments associated with the smoking worker. This means it has to do with who the worker is — and smokers on average have a lower level of education than non-smokers. It's unsurprising that those with college degrees earn more than those without.

But what if you decide that you want to quit? Fortunately, the difference between ex-smokers (who make up 20% of the non-smoking population in their dataset) and those who have never smoked is small.

The best thing to do to increase wages is go to school more, but beyond these endowment effects, there are some unmeasurable quantities — including an employer's intolerance or dislike for smokers.

Hotchkiss and Pitts did find that the wage differential was not as large potentially for those who did not smoke during working hours. This, along with the indifference to smoking intensity, suggests how smoking is an issue of identity.

For some, considering the embattled state of smoking in certain parts of America (particularly New York), it is more than a habit but a veritable source of identity. This in turn might be linked to someone's culture. Asian-Americans in New York have been frustrated by Mayor Bloomberg's efforts to further limit smoking, as it's widely accepted in many East Asian cultures.

Ultimately, the campaigns against smoking as detrimental to health have been incorporated into our culture in such a way that, probably subconsciously, smokers are paying a further price of cultural intolerance. Smoking is an increasingly difficult choice — both for one's health and one's prospects.

How much do you trust the information in this article?

Ben Eckersley

Ben is a recent graduate of Columbia University, where he studied history, ecology and economics. He lives in Xinjiang, China teaching at a university on a Princeton in Asia fellowship.

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