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

Evidence suggests that excise taxes on tobacco improve fetal health. It remains unknown if smoke exposure causes lasting harm to children. I find that a one dollar increase in the state cigarette excise tax causes a 10% decrease in sick days from school, and a 4.5% decrease in the likelihood of having two or more doctor visits in the past 12 months. I find suggestive evidence for decreases in emergency room visits, hospitalizations, and asthma. This supports the hypothesis that in-utero exposure to smoking carries significant medium-term costs and excise tax policy can result in lasting intergenerational improvements in wellbeing. JEL Codes: H71, I14. I am indebted to my dissertation chairs, Hilary Hoynes and Doug Miller. I would like to thank Marianne Page, Colin Cameron, seminar participants at UNC-Greensboro, the UC-Davis brown bag series, and the All-CA labor economics conference for their great feedback on this paper. I would like to thank Patricia Barnes and the staff at the Center for Disease Control Research Data Center in Maryland for support in accessing my data. The findings and conclusions in this paper are those of the author and do not necessarily represent the views of the National Center for Health Statistics or the Centers for Disease Control and Prevention. The Russell J. and Dorothy S. Bilinski Fellowship Fund provided me with irreplaceable financial support. Finally, I would like to thank Donald S. Kenkel for providing me with data on state anti-smoking sentiment.