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

• Published date: 01 March 2022
• Author: Maryam Dilmaghani
• Date: 01 March 2022
• DOI: http://doi.org/10.1111/irj.12361

ORIGINAL ARTICLE

The link between smoking, drinking and

wages: Health, workplace social capital or

discrimination?

Maryam Dilmaghani

Department of Economics, Sobey School

of Business, Saint Mary's University,

Halifax, Nova Scotia, Canada

Correspondence

Maryam Dilmaghani, Department of

Economics, Sobey School of Business,

Saint Mary's University, 923 Robie Street,

Halifax, NS B3H 3C3, Canada.

Email: maryam.dilmaghani@smu.ca

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 infor-

mation 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.

1|INTRODUCTION

Workplace fairness is impactful for both employee well-being and productivity (Baert, 2014;

Bender et al., 2017; Demuijnck, 2009; Gallie et al., 2021; Greenwood, 2002, 2013; Roulin &

Bhatnagar, 2018, 2021). Accordingly, industrial relations research and policy are increasingly

concerned with the implementation of equitable workplace practices. For protected groups, fair-

ness and equity measures are formally required by Human Rights legislations and are usually

safeguarded by worker unions or employee voice mechanisms, when they are available (Bender

DOI: 10.1111/irj.12361

© 2022 Brian Towers (BRITOW) and John Wiley & Sons Ltd.

160 Ind. Relat. 2022;53:160–183.wileyonlinelibrary.com/journal/irj

et al., 2017; Dundon, 2002; Metten, 2021; Seifert & Wang, 2018). Human Rights legislations

cover immutable characteristics such as ethnicity and race, and some malleable attributes such

as religion and disability (Kruse et al., 2018; Seifert & Wang, 2018). But, there are stigmatizing

features, such as smoking and being overweight, which are usually not protected by these laws

(Roulin & Bhatnagar, 2018, 2021). While discrimination in the workplace has several dimen-

sions, manifested in the hiring phase, pay and promotion, and day-to-day interactions, given

the greater data availability, labour market inequity is often examined through the assessment

of wage gaps (Bender et al., 2017; Kruse et al., 2018). Across disciplines, scholars suggest that

the presence of a stigmatized identity plays a key role in triggering discriminatory treatment in

all these dimensions (Link & Phelan, 2001, 2014; Roulin & Bhatnagar, 2018, 2021; William

et al., 2019).

Until well into the mid-20th century, smoking was a status signal for men and a symbol of

freedom for women (Dilmaghani, 2021a, 2021b; Roulin & Bhatnagar, 2021). Starting from the

1960s, negative health effects of smoking were identified and widely publicized. Stigmatization

is often used in public health campaigns in order to reduce the appeal of unhealthy and risky

behaviours and was implemented in anti-tobacco campaigns (Bayer & Stuber, 2006; Link &

Phelan, 2001; Roulin & Bhatnagar, 2018, 2021). Currently, at least in western high-income

countries, smokers are stigmatized as social outcasts, perceived as unhealthy, unlikeable and

self-destructive (Bayer & Stuber, 2006; McCool et al., 2013; Roulin & Bhatnagar, 2021). Organi-

zations are not insulated from these negative sentiments, and many have implemented smoke

and even smoker free workplace policies (Houle & Siegel, 2009; Lecker, 2009; Roulin &

Bhatnagar, 2018, 2021). Despite these efforts, a non-negligible portion of populations continue

to smoke, with about 16% in the United States, 11% in Canada, 18% in the United Kingdom and

27% in France (Roulin & Bhatnagar, 2021). In addition, smokers increasingly belong to the

lower socio-economic strata of populations (Dilmaghani, 2021a, 2021b; Pampel et al., 2010,

2014, 2015). Hence, discriminatory labour market practices against smokers affect a rather large

and generally vulnerable group.

In addition to the emerging evidence on hiring discrimination against smokers (Roulin &

Bhatnagar, 2018, 2021), over several decades and for many countries, smokers have been found

to earn less than non-smokers (Darden et al., 2021). The wage penalty of smoking has been esti-

mated to be non-negligible, in the range of at least 8% (Darden et al., 2021; Levine et al., 1997;

van Ours, 2004). Smokers also have lower life-time incomes than non-smokers (Böckerman

et al., 2015). To date, the root causes of this wage penalty are not conclusively established. In a

parallel literature, the association of drinking with labour market outcomes has been assessed

(van Ours, 2004). In contrast to smoking, moderate alcohol consumption has been associated

with higher wages (Barrett, 2002; Berger & Leigh, 1988; French & Zarkin, 1995; Hamilton &

Hamilton, 1997; Heien, 1996; Lee, 2003; MacDonald & Shields, 2001, 2004; Ziebarth &

Grabka, 2009).

The present study contributes to this scholarship in at least two ways. First, it updates the

literature regarding the Canadian labour market, not studied since Auld (2005) and Hamilton

and Hamilton (1997), which used data from the General Social Surveys of 1985 and 1991. In

light of the increasingly stringent anti-tobacco policies and generally greater health conscious-

ness across populations, this updating of the literature is necessary. Second, the present article,

exploiting the rich questions of the Canadian General Social Survey of 2016 (GSS-2016), exam-

ines the channels of impact of smoking and drinking on wages, with a focus on the presence of

discrimination. Given the increasing stigmatization of smoking (Houle & Siegel, 2009;

THE LINK BETWEEN SMOKING, DRINKING AND WAGES: HEALTH, WORKPLACE SOCIAL

CAPITAL OR DISCRIMINATION?

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