In this research, we try to estimate the relationship between health status and
smoking behaviour on the labour wage in Indonesia. We investigate using Indonesian
Family Life Survey (IFLS) data and two-step Heckman correction to
deal with sample selection bias. We found that there is significance relationships
between all socioeconomic variables and wage both for smokers and nonsmokers.
The interesting thing is that the effect on wage is less for smokers
than non-smokers.