Rong Hai, an associate economics professor in the University of Miami Patti and Allan Herbert Business School, investigates people's behaviors that influence human capital decisions and policies that promote this accumulation and ultimately reduce poverty.
Hai and James Heckman, who according to Research Papers in Economics (RePEc) is the third most influential economist in the world, recently collaborated to study the causal effect of youth cigarette addiction on the choice to attend college. Their research has been accepted for publication in the Journal of Political Economy.
"The paper explores the causal relationship between youth cigarette addiction and education and offers a different way to look at the intersection," Hai said. "The negative correlation has been well known, but the question is how much smoking—or any kind of adverse or addictive behavior—has on education choices.
"When making lifetime choices, everything is tied together. Smoking is a decision, and going to college is a decision. An individual's addiction decision is not independent of their decisions on human capital investment," Hai added.
Accumulating human capital is essential for living a flourishing life, and it is a critical channel for youth from lower socioeconomic backgrounds who seek to rise out of poverty. In this regard, Hai highlighted one of the most generally accepted benefits of education—that people earn more over time, which is good for society. Yet she emphasized that the research revealed other benefits as well.
If you can increase education, you can reduce smoking, which has many detrimental effects. The causal effect of education on smoking is an additional benefit of education.
This study also investigates the causal effects of smoking addiction on education. Smoking addiction negatively affects youth time preferences and preferences toward schooling.
"Our finding of reverse causality whereby smoking reduces education is novel. The main policy implication of our results is that policies that aim to reduce youth smoking also yield additional benefits by fostering increased investment in education," Hai noted.
Hai met Heckman, renowned for his empirical research in labor economics and scholarship on the efficacy of early childhood education programs and who won the 2000 Nobel Memorial Prize in Economic Sciences, while doing postdoctoral work at the University of Chicago. The two economists have collaborated previously and expect to continue to do so.
This study focused on a cohort of youth born between 1982 and1984 who take up smoking and their decisions on whether to attend college. The research concluded that if youth between the ages of 15 and 30—a time when they are deciding whether to attend college—can be prevented from ever starting to smoke, their college attendance would increase by two percentage points.
The same model and empirical method can be utilized by future research, Hai emphasized.
"Moving forward, my research has a lot of implications for other types of addictive adverse behaviors and their implications on educational investment. It could be opium, cocaine, alcohol, or other substance addictions," she said. "These adverse addictive behaviors can have an impact on educational decisions, and our model's framework can be applied to analyze them."
Hai's research finds that the harmful impact of smoking addiction on education primarily affects youth who are in the median in terms of their cognitive ability and who are low on noncognitive skills such as self-discipline. As they strive to accumulate human capital and rise above their situations, their decisions on smoking addiction critically impact their potential to succeed.
"Those youth who have lower self-discipline are the ones very much at risk if they pick up a bad habit," Hai said. "This population is very vulnerable to being derailed from a successful life.
"Adverse behaviors such as smoking addiction can reduce human capital accumulations, and that's crucial and has a lot of implications for policy," said Hai.
In her collaboration with Heckman, she's become more focused on the interactions between human capital and health behaviors such as addiction.
"It's a topic of joint interest and a field and good space for me to contribute," she said. "My concerns for inequality lead me to be interested in policies that are effective at promoting human capital accumulation and reducing poverty."
