Does Early Life Exposure to Cigarette Smoke Permanently Harm Childhood Welfare? Evidence from Cigarette Tax Hikes

Monday, June 13, 2016: 8:30 AM
402 (Claudia Cohen Hall)

Author(s): David Simon

Discussant: Benjamin Brewer

Evidence suggests that excise taxes on tobacco improve fetal health.  However, it remains unknown if smoke exposure in early life causes lasting harm to children.  I find that in-utero exposure to a dollar increase in the state cigarette tax causes a 10% decrease in sick days from school and a 4.7% decrease in having two or more doctor visits.  I present additional evidence for decreases in hospitalizations and asthma.  This supports the hypothesis that exposure to cigarette smoke in utero and infancy carries significant medium-term costs, and that excise taxes can lead to lasting intergenerational improvements in wellbeing.