The Obese Smoker's Wage Penalty*

Abstract

Objective. Smoking and obesity are associated with significant wage penalties when considered separately. We assess the combined effects of those behaviors.Methods. We estimate the effects of smoking and obesity on wages using multivariate regression analysis with 1979 National Longitudinal Survey of Youth data.Results. The raw data indicate that obese smokers experience large earnings penalties. However, these penalties are not found to be interactive or directly causal for most of the demographic subgroups we examine. One exception is the wage penalty associated with obesity for females, which remains significant throughout the analysis.Conclusions. In the absence of a demonstrable direct causal effect of those behaviors on wages, associated individual‐specific socioeconomic factors appear to be the driving forces behind the obese smoker wage penalty. Not included, but potentially significant, are the effects of employer and customer discrimination against obese smokers and the possible labor policy implications of such discrimination.