| Abstract: | There is much debate as to whether or not the passage of no‐smoking laws has adverse consequences for businesses in the hospitality industry. In 2010, the state of Wisconsin implemented a law that banned smoking in all public places. Using a panel of county‐level employment data, I examine the relationship between the implementation of smoking bans in Wisconsin and the subsequent changes in bar and restaurant employment. Using variation in the timing of bans that occurred as a result of four counties that implemented local bans prior to the July 2010 statewide ban, I conduct a difference‐in‐differences analysis to measure the average treatment effect of implementing a smoking ban in Wisconsin. I find that restaurant employment is not affected and that bar employment is significantly reduced as a result of the smoking ban. I also find that counties with higher levels of smoking prevalence see greater reductions in bar employment when a smoking ban is enacted. Back‐of‐the‐envelope estimates suggest that even though there are employment losses, the benefits of the smoking ban outweigh the costs. (JEL L510, D780) |
