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How does actual unemployment and the perceived risk of joblessness affect smoking behavior? Gender and intra-family effects

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Abstract

Using the 1999–2011 waves of the Panel Study of Income Dynamics, we examine how actual unemployment and the perceived risk of joblessness, as reflected by exogenous aggregate unemployment rates, are related to changes in smoking behavior. The analysis allows for intra-family and gender-specific effects. We find that among men, becoming unemployed initially has a favorable impact on smoking behavior, including a decreased likelihood of a smoking relapse and decreased cigarette consumption. However among men who are unemployed long term, some of these favorable effects attenuate. Among women, we find that becoming unemployed initially has a small impact on quitting smoking. However, being unemployed long term decreases their likelihood of quitting smoking. The perceived risk of unemployment has very little impact on men but affects women’s smoking behavior. Results indicate that women experiencing an increase in their state’s unemployment rate are more likely to change their smoking behavior favorably.

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Notes

  1. Most of the existing literature in this area concentrates either on an aggregate unemployment rate (Charles and Decicca 2008; Ruhm 2000, 2005) or on actual unemployment (Falba et al. 2005) rather than considering the impact of both of these aspects of unemployment simultaneously.

  2. After the employment status questions, individuals who reported being “retired”, “permanently disabled; temporarily disabled”, “keeping house”, “student”, “looking for work, unemployed” are further asked a verification question on whether they are “doing any work for money now”. Those who report working for money are recoded as being currently employed. Very few individuals have their current employment status recoded because of this verification question. For instance, in the analytic sample used only 5 women and 13 men had their employment status recoded in 2001.

  3. This is done to separate out-of-labor force spells due to retirement, pregnancy, and other factors from unemployment spells.

  4. Note that this approach may potentially overestimate the number of recently unemployed individuals. For instance, while employed at a current job, a person may have found another job, quit the present job and started the new position. There may have been a time spell between these two jobs during which a person stayed out of labor force. However, since we rely on job gap information for only a part of the 12 months prior to the interview, this measurement error is not likely to be substantial. Overestimating the number of recently unemployed individuals could potentially bias the estimated regression results toward zero.

  5. Since the PSID provides monthly unemployment indicators, a person is classified as being unemployed in a particular month if she was unemployed at any time during this month.

  6. Three states - Florida, Louisiana, and Nevada - introduced smoking bans in private workplaces and restaurants but not in bars. Since only 6.3% of the analytic sample lives in these states, we classified these states also as having a comprehensive clean air policy.

  7. Since we consider intra-family effects, married women are included as spouses in the male smoking behavior analysis, and married men are included as spouses in the female smoking behavior analysis. However, married women who do not participate in the labor force are excluded from the analysis of female smoking behavior but are included as spouses in the male smoking behavior analysis. Likewise, married men who do not participate in the labor force are excluded from the analysis of male smoking behavior but are included as spouses in the female smoking behavior analysis.

  8. Results of the pooled OLS regression models are not shown but are available upon request.

  9. Marginal effects are estimated at the sample mean values for pooled logistic regression models.

  10. As a sensitivity check we re-estimated linear fixed effects regression models for men and women without the use of sample weights. We found small differences between the weighted and unweighted estimation results. As another sensitivity check we re-estimated the linear fixed effects models for the subsample of married households and found that, although the size of coefficients differ somewhat, statistical significance largely remains the same. Results appear to be robust if the sample is limited to married or cohabitating individuals.

  11. The share of long-term unemployed among employed individuals with recent unemployment experience is much smaller. About a fifth of recently unemployed individuals spent 6 months or more of the past year being unemployed.

  12. Recall that in the PSID, a person is classified as unemployed during a particular month if he or she was unemployed at any time during the month, not necessarily during the entire month. Thus, the measure of long term unemployment we use is not identical to the 27 week definition used by the BLS.

  13. Research (Wang and Heitjan 2008) suggests that some individuals are likely to report rounded-off counts of number of cigarettes smoked in multiples of 5 while others tend to be more precise in their reports of cigarette consumption. We conducted a sensitivity check that required a continued smoker to change his or her cigarette consumption by at least five cigarettes to be classified as someone who decreased or increased their cigarette consumption and re-estimated the models presented in Tables 47. The results were very similar to the ones presented in this paper, though, some effects became marginally insignificant.

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Acknowledgements

The authors would like to thank Andrew Barnes, participants at the 5th Biannual Conference of the American Society of Health Economists (ASHEcon), participants at the Panel Study of Income Dynamics User Conference, and participants at seminars at the Rutgers Institute for Health, Health Care Policy and Aging Research and at the Rutgers School of Public Health Faculty Research Seminar for helpful comments.

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Correspondence to Irina B. Grafova.

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Grafova, I.B., Monheit, A.C. How does actual unemployment and the perceived risk of joblessness affect smoking behavior? Gender and intra-family effects. Rev Econ Household 17, 201–227 (2019). https://doi.org/10.1007/s11150-017-9373-1

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