How do Smoker Protection Laws affect Labor Market Outcomes for Smokers?

A popular question in some arenas asks if it is ethical to discriminate against smokers in the labor market.  Some would argue that smokers be treated analogously to others with substance abuse, while others would suggest smokers are less productive and preferred unfavorably compared to otherwise equal nonsmokers.  Twenty – nine states and Washington, DC have anti – discrimination laws that prevent employers from discriminating against hiring workers that smoke and protect employees from being fired if they do smoke tobacco.   We assess the effects of smoker protection laws on unemployment rates and earnings among smokers using a difference – in – difference approach.  If the effective of the laws is protective, then we expect to find no difference in the earnings or employment rates between smokers and non-smokers in states where the law is present.  To empirically test this hypothesis, we use the Current Population Survey’s (CPS) Tobacco Use Supplement (TUS). Using the 2010 – 2011 wage of the CPS – TUS, we find smokers to be 5 percentage points more likely to be unemployed relative to nonsmokers in states where no protections against smoker discrimination exist.  We find qualitatively similar results for earnings using an ordinal logit model suggesting smokers tend to earn lower wages than nonsmokers.  Consistent with our hypothesis, we find the differences to dissipate when state level anti – discrimination laws protecting smokers are in place.  Our preliminary findings were robust to alternative specifications of the regression model such as smoking behavior (i.e. everyday smoker, light smoker, former smoker) and the inclusion of state level fixed effects.  There appear to be few quantitative evaluations of the impacts of the smoker protection laws on workforce outcomes among smokers.  We present some evidence suggesting how labor market outcomes change for smokers in the presence of such anti – discrimination laws, and will discuss some extensions into how insurance premiums are also likely to be affected by these laws as well.