Forgone Earnings from Smoking: Evidence for a Developing Country

27 Pages Posted: 20 Apr 2016

See all articles by Michael Lokshin

Michael Lokshin

World Bank - Development Research Group (DECRG); National Research University Higher School of Economics

Kathleen Beegle

World Bank - Development Research Group (DECRG)

Date Written: October 1, 2006

Abstract

The authors estimate the economic losses related to the negative effect of smoking on wages in a context of a developing country. Using data from the 2005 Albania Living Standards Monitoring Survey, they jointly estimate a system of three equations: the smoking decision and two separate wage equations for smokers and nonsmokers. The results show that, after controlling for observed characteristics and taking into account unobserved heterogeneity in personal characteristics, smoking has a substantial negative impact on wages. On average smokers' wages are 20 percent lower than the wages of similar nonsmokers, providing strong evidence for the potential policy relevance of tobacco control initiatives for developing countries.

Keywords: Health Monitoring & Evaluation, Tobacco Use and Control, Alcohol and Substance Abuse, Adolescent Health, Disease Control & Prevention

Suggested Citation

Lokshin, Michael and Beegle, Kathleen, Forgone Earnings from Smoking: Evidence for a Developing Country (October 1, 2006). World Bank Policy Research Working Paper No. 4018, Available at SSRN: https://ssrn.com/abstract=934665

Michael Lokshin (Contact Author)

World Bank - Development Research Group (DECRG) ( email )

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HOME PAGE: http://econ.worldbank.org/staff/mlokshin

National Research University Higher School of Economics

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

Kathleen Beegle

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States

HOME PAGE: http://econ.worldbank.org/staff/kbeegle

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