Objective To examine the long-term effects of smoking on labour market outcomes using twin data matched to register-based individual information on earnings.

Method Twin data for Finnish men born 1945–1957 was used to remove the shared environmental and genetic factors. The results were subjected to extensive robustness testing. Lifetime cigarette consumption was measured by (cumulative) cigarette pack-years in early adulthood. The average of an individual's earnings (and, alternatively, taxable income) was measured over a subsequent 15-year period in later adulthood.

Results Smokers have lower long-term income and earnings. For example, controlling for the shared environmental and genetic factors using the data on genetically identical twins, smoking is negatively associated with lifetime income (p=0.015). The negative association was also robust to the use of various covariates, such as education, health indicators and extraversion.

Conclusions Smoking is negatively related to long-term labour market outcomes. The provision of information about the indirect monetary costs of smoking may thus complement the policy efforts that aim at educating consumers about the health costs of smoking.