Academic journal article Contemporary Economic Policy

Is Employment Discrimination Based on Tobacco Use Efficient?

Academic journal article Contemporary Economic Policy

Is Employment Discrimination Based on Tobacco Use Efficient?

Article excerpt


Tobacco use is costly to individuals who smoke or ingest its contents by chewing. It is costly in terms of the additional medical care assumed by its current and former users, in terms of lost work days, and in terms of reduced life expectancy. It has health consequences that are similar to several other behaviors such as over eating. lack of exercise, excessive alcohol consumption, or the consumption of a range of drugs. Furthermore, where there exists a public health system, as in Canada and much of Europe, or an insurance-driven private system, as in most large organizations in the United States, the result of these individual choices and behaviors is that some of the costs and consequences are passed on to others: this is a classic problem of externalities.

Our paper has two objectives. One is to examine the degree to which smokers generate excess medical costs relative to individuals with other morbidities. The second objective is to better understand the measurement of the excess medical costs associated with being a former smoker, in particular the time lags associated with improved health post-quit. The term "excess medical costs" is used to denote the costs associated with one or more of these conditions or behaviors relative to the costs of not having such conditions and being a "never smoker."

The cost issue has considerable importance in the public policy domain at the present time. Many employers in the United States--health institutions in particular--refuse to employ smokers. These employers are not content to ban smoking in the place of employment (Siegel 2011: Sulzberger 2011; Zamora 2012). More than half of all states prohibit hiring discrimination on grounds such as being a smoker, but 21 do not (McDaniel and Malone 2012). Hospitals in Florida, Georgia, Massachusetts, Missouri, Ohio, Pennsylvania. Tennessee. and Texas discriminate in their hiring decisions. (1)

This type of discrimination appears limited at the present time--primarily to hospitals. However, a number .of nonhealth-based institutions also discriminate, and such discrimination is seen as a potential means of reducing smoking (McDaniel and Malone 2012). But given the legality of the practice it is appropriate to examine its efficacy as a means of cost reduction for any type of employer. Indeed the Floridian city of Delray Beach recently approved a ban on hiring smokers (RT 2012).

The hiring policy is motivated by considerations that go beyond the potential health damage associated with second-hand smoke (SHS). The dominant belief in the medical community at the present time is that even small reductions in tobacco-related toxins in ambient air can reduce the potential for a range of cardio-pulmonary morbidities--particularly myocardial infarction (Pell et al. 2008). This is also the definitive conclusion of the Institute of Medicine (IOM 2009). (2) However, SHS damage can be controlled by prohibiting smoking in the environs of the employment location; it is not necessary to discriminate against smokers at the hiring point.

Accordingly, employment discrimination has two objectives: one is to protect the individual from herself--smoking is bad for health and smokers do not behave in their own best interests. Second, smoking is costly to the employer: because smokers incur more sick days than nonsmokers they have lower productivity, and also because of higher insurance costs incurred by the employer wherever an insurance plan is on offer to employees. The first motive could be termed paternalism, the second motive employment efficiency or cost minimization. A good example of the stated reasoning behind the first type of discrimination is to be found in Cleveland Clinic (2007). (3)

The paternalist motive for discrimination runs counter to the rational addiction model of Becker and Murphy (1988). They perceive smokers as individuals who may be willing to trade off nearer-term pleasure with longer-term poorer health. …

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