Abstract
This paper examines the effect of job stress on two key health risk-behaviors: smoking and alcohol consumption, using data from the Canadian National Population Health Survey. Findings in the extant literature are inconclusive and are mainly based on standard models which can model differential responses to job stress only by observed characteristics. However, the effect of job stress on smoking and drinking may largely depend on unobserved characteristics such as: self control, stress-coping ability, personality traits and health preferences. Accordingly, we use a latent class model to capture heterogeneous responses to job stress. Our results suggest that the effects of job stress on smoking and alcohol consumption differ substantially for at least two "types" of individuals, light and heavy users. In particular, we find that job stress has a positive and statistically significant impact on smoking intensity, but only for light smokers, while it has a positive and significant impact on alcohol consumption mainly for heavy drinkers. These results provide suggestive evidence that the mixed findings in previous studies may partly be due to unobserved individual heterogeneity which is not captured by standard models.