The link between smoking, drinking and wages: Health, workplace social capital or discrimination?

Abstract

Using the Canadian General Social Survey of 2016, the present article examines how smoking and drinking associate with earnings. Among both men and women, those who drink have higher wages than the abstainers. The investigation of the channel of impact indicates that health and workplace social capital only explain a small portion of the drinking premium. There is a penalty associated with occasional smoking for men and daily smoking for women. Likewise, health status and workplace social capital cannot fully explain these gaps away. Further explorations, exploiting information on workplace size and union status of the employees, suggest that the patterns are at least partly driven by differentiated treatment and discrimination. The implications are discussed.