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Smoking damages your wages, but heavy drinking aggravates the damages

Author

Listed:
  • Chee Kian Leong

    (University of Nottingham, School of Economics)

  • Lefan Liu

    (University of Birmingham, Health Economics Unit, Institute of Applied Health Research)

Abstract

This paper analyzes the causal effects of smoking and drinking on wages for a sample of older male workers in China. Smoking and drinking are complementary, and wrong inferences may result if they are considered independently. Generally, male smokers incur short- and long-run wage penalties, with the long-run penalties aggravated if they drink too. Such penalties can be reduced if males quit smoking and abstain from drinking, with those who quit both benefiting the most. Wage premia for workers in the private sector are no longer significant once smoking–drinking complementarity is accounted for. The intensities of smoking and drinking are consequential, with moderate smoking harming both short-run and long-run wages even in the absence of drinking. The lower wage penalties in China may be attributed to cultural or social norms vis-à-vis smoking and drinking.

Suggested Citation

  • Chee Kian Leong & Lefan Liu, 2025. "Smoking damages your wages, but heavy drinking aggravates the damages," Empirical Economics, Springer, vol. 69(6), pages 4033-4055, December.
    • Handle: RePEc:spr:empeco:v:69:y:2025:i:6:d:10.1007_s00181-025-02835-9
    DOI: 10.1007/s00181-025-02835-9
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    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C55 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Large Data Sets: Modeling and Analysis

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