Dastan, Iker (2010). Labor market effects of obesity, smoking, and alcohol use. Master's thesis / Doctoral dissertation.
This dissertation analyzes the joint effects of obesity, smoking, and binge drinking on wages and on unemployment by using the National Longitudinal Survey of Youth data set. The main objective of this study is to show that the effects of these behaviors on wages and unemployment may not be measured accurately in analyses that consider only one or two since these behaviors are correlated or tend to cluster. My results illustrate that failing to include one or more of the health behaviors in wage or unemployment regression would lead to an underestimation of the impact of being obese and an overestimation of the effect of binge drinking for both genders. However, when endogeneity is addressed by employing the Hausman-Taylor instrumental variable (HTIV) method in wage analysis and the multivariate probit method in unemployment analysis, I find that the estimated parameters of obesity or binge drinking are not statistically significantly different whether these behaviors are considered individually or simultaneously. iii This study also conducts several sensitivity analyses. Firstly, the results reveal that the effects of these behaviors are not interactive. Secondly, the paper illustrates that the wage penalties for daily smoking are fairly constant over the wage distribution for both genders, but obesity affects the wages of males and females relatively more at lower quantiles of wages, and there is no wage penalty for being a binge drinker for either gender. Further, it is found that smokers are a heterogeneous group of people. In particular, the wage and unemployment effects of persistent smokers are different than beginning smokers and quitters. Moreover, obesity affects the wages and the likelihood of being unemployed of males only at the extremes of obesity. Lastly, I find evidence of wage penalties for being obese or a smoker in private sector jobs, but in the public sector only male smokers face lower wages.