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Cigarette Smokers as Job Risk Takers

39 Pages Posted: 5 Oct 2000  

W. Kip Viscusi

Vanderbilt University - Law School; National Bureau of Economic Research (NBER); Vanderbilt University - Department of Economics; Vanderbilt University - Owen Graduate School of Management; Vanderbilt University - Strategy and Business Economics

Joni Hersch

Vanderbilt University - Law School; IZA Institute of Labor Economics; Vanderbilt University - Owen Graduate School of Management; Vanderbilt University - College of Arts and Science - Department of Economics

Date Written: August 2000

Abstract

Using a large data set, the authors find that smokers select riskier jobs, but receive lower total wage compensation for risk than do nonsmokers. This finding is inconsistent with conventional models of compensating differentials. The authors develop a model in which worker risk preferences and job safety performance lead to smokers facing a flatter market offer curve than nonsmokers. The empirical results support the theoretical model. Smokers are injured more often controlling for their job's objective risk and are paid less for these risks of injury. Smokers and nonsmokers, in effect, are segmented labor market groups with different preferences and different market offer curves.

JEL Classification: J28, J17, I12

Suggested Citation

Viscusi, W. Kip and Hersch, Joni, Cigarette Smokers as Job Risk Takers (August 2000). Review of Economics and Statistics. Available at SSRN: https://ssrn.com/abstract=239962 or http://dx.doi.org/10.2139/ssrn.239962

W. Kip Viscusi (Contact Author)

Vanderbilt University - Law School ( email )

131 21st Avenue South
Nashville, TN 37203-1181
United States
615-343-7715 (Phone)
615-322-5953 (Fax)

HOME PAGE: http://law.vanderbilt.edu/faculty/viscusi.htm

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Vanderbilt University - Department of Economics

Box 1819 Station B
Nashville, TN 37235
United States
(615) 343-7715 (Phone)
(615) 343-5953 (Fax)

HOME PAGE: http://law.vanderbilt.edu/faculty/viscusi.htm

Vanderbilt University - Owen Graduate School of Management

401 21st Avenue South
Nashville, TN 37203
United States
(615) 343-7715 (Phone)
(615) 343-5953 (Fax)

HOME PAGE: http://law.vanderbilt.edu/faculty/viscusi.htm

Vanderbilt University - Strategy and Business Economics ( email )

Nashville, TN 37203
United States

Joni Hersch

Vanderbilt University - Law School ( email )

131 21st Avenue South
Nashville, TN 37203-1181
United States
615-343-7717 (Phone)
615-322-6631 (Fax)

HOME PAGE: http://law.vanderbilt.edu/go/phdlawecon

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Vanderbilt University - Owen Graduate School of Management

401 21st Avenue South
Nashville, TN 37203
United States

Vanderbilt University - College of Arts and Science - Department of Economics

Box 1819 Station B
Nashville, TN 37235
United States

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