Does smoking affect schooling? Evidence from teenagers in rural China.

Youth smoking can biologically reduce learning productivity. It can also reduce youths' expected returns to education and lower their motivation to go to school, where smoking is forbidden. Using rich household survey data from rural China, this study investigates the effect of youth smoking on educational outcomes. Youth smoking is clearly an endogenous variable; to obtain consistent estimates of its impact, we use counts of registered alcohol vendors and a food price index as instrumental variables. Since the variable that measures smoking behavior is censored for non-smoking adolescents, we implement a two-step estimation strategy to account for the censored nature of this endogenous regressor. The estimates indicate that smoking one cigarette per day during adolescence can lower students' scores on mathematics tests by about 0.08 standard deviations. However, we find no significant effect of youth smoking on either Chinese test scores or total years of schooling.