Understanding the Gradient in Children's Health : Cigarette Taxes, Asthma, and Inequality

The origins of inequality have roots in childhood. Childhood asthma, the most common disease affecting children, disproportionately affects minority and lower SES children. Decades of research shows a strong association between tobacco exposure and respiratory illnesses. By exploiting exogenous variation in cigarette taxes across states and time, I estimate the causal impact of early life tobacco exposure on measures of children’s well-being such as asthma, asthma severity, self-reported health, and school absences. I find economically and statistically significant impacts of cigarette taxes in improving children’s health: a one dollar increase in cigarette taxes reduces the prevalence of asthma by 3.4 percentage points, and raises school attendance by nearly half a day. The largest reductions in asthma are seen in children from the poorest households. Subsequently, decomposing the asthma gap reveals that differences in responses to cigarette taxes by SES can explain three quarters of the gap in asthma prevalence