Returns to education and smoking : evidence from Germany

• Main Author: Reilich, Julia
• Format: Others
• Language: English
• Published: Universität Potsdam 2011
• Subjects: Economics
• Online Access: http://nbn-resolving.de/urn:nbn:de:kobv:517-opus-53883; http://opus.kobv.de/ubp/volltexte/2011/5388/

Looking at smoking-behavior it can be shown that there are differences concerning the time-preference-rate. Therefore this has an effect on the optimal schooling decision in the way that we appear a lower average human capital level for smokers. According to a higher time-preference-rate additionally we suppose a higher return to education for smokers who go further on education. With our empirical findings we can confirm the presumptions. We use interactions-terms to regress the average rate of return with IV. Therefore we obtain that smokers have a significantly higher average return to education than non-smokers.