Smoking damages your wages, but heavy drinking aggravates the damages

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.