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Alcohol Abuse, Alcoholism, and Labor Market Outcomes: Looking for the Missing Link

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  • Francesco Renna

Abstract

There is puzzling evidence that alcohol abuse and alcoholism reduce labor earnings but have no effect on either hours worked or the hourly wage. This study revisits the link between problem drinking and earnings using data from the 1989 and 1994 waves of the National Longitudinal Survey of Youth. Questions about problem drinking were keyed to a table of symptoms for alcohol abuse and alcoholism in the Diagnostic and Statistical Manual of Mental Disorders . The author finds no effects associated with alcohol abuse. In OLS regressions, alcoholism appears to have had negative effects on both labor market outcomes. In the lag variable and in the first difference regressions, alcoholism's negative effect on wages disappears, but its negative effect on hours of work remains, suggesting that the negative effect of alcoholism on earnings operates through reduced work hours. These results of the two-stage least squares are inconclusive.

Suggested Citation

  • Francesco Renna, 2008. "Alcohol Abuse, Alcoholism, and Labor Market Outcomes: Looking for the Missing Link," ILR Review, Cornell University, ILR School, vol. 62(1), pages 92-103, October.
    • Handle: RePEc:sae:ilrrev:v:62:y:2008:i:1:p:92-103
    DOI: 10.1177/001979390806200105
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    References listed on IDEAS

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    1. French, Michael T. & Zarkin, Gary A., 1995. "Is moderate alcohol use related to wages? Evidence from four worksites," Journal of Health Economics, Elsevier, vol. 14(3), pages 319-344, August.
    2. Alison Snow Jones & David W. Richmond, 2006. "Causal effects of alcoholism on earnings: estimates from the NLSY," Health Economics, John Wiley & Sons, Ltd., vol. 15(8), pages 849-871, August.
    3. Vivian Hamilton & Barton H. Hamilton, 1997. "Alcohol and Earnings: Does Drinking Yield a Wage Premium," Canadian Journal of Economics, Canadian Economics Association, vol. 30(1), pages 135-151, February.
    4. Fuchs, Victor R. (ed.), 1982. "Economic Aspects of Health," National Bureau of Economic Research Books, University of Chicago Press, number 9780226267852.
    5. Bethany Peters, 2004. "Is there a wage bonus from drinking? Unobserved heterogeneity examined," Applied Economics, Taylor & Francis Journals, vol. 36(20), pages 2299-2315.
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    Cited by:

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    2. Yörük, Barış K., 2014. "Can technology help to reduce underage drinking? Evidence from the false ID laws with scanner provision," Journal of Health Economics, Elsevier, vol. 36(C), pages 33-46.
    3. Yörük Barış K., 2017. "Health Insurance Coverage and Risky Health Behaviors among Young Adults," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 17(3), pages 1-21, July.
    4. Sarah See, 2016. "Parental supervision and adolescent risky behaviors," Review of Economics of the Household, Springer, vol. 14(1), pages 185-206, March.
    5. Andrew Sharpe & Alexander Murray, 2011. "State of the Evidence on Health as a Determinant of Productivity," CSLS Research Reports 2011-04, Centre for the Study of Living Standards.

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