Smoking and wage penalty in the Brazilian labor market

Abstract

This research investigates the heterogeneity of the repercussion of unhealthy personal behaviors, expressed by cigarette smoking, on labor productivity in Brazil. Based on the Special Smoking Survey included in the National Survey by Household Sample 2008, the central empirical models are developed by instrumental variable quantile regression. The findings evidence that smokers, regardless of conditioned models for average or quantile with and without instrumental variables, have lower labor income in Brazil. Thus, the smoking wage penalty with endogeneity control ranges from 15,2% to 36,5% over the conditional distribution of individual income.