Title

Alcohol Use and Wages of Young Men: Whites vs. Nonwhites

Abstract

According to the medical community a host of ills accompanies prolonged alcohol use including memory loss, motor dysfunction, and impaired judgement. While deduction suggests alcohol use would reduce wages, past empirical studies find differently. For example, Berger and Leigh (1988) find a 32% wage premium for drinkers. Our study differs in two ways. First, self-selection is corrected using observed variables and secondly, an adjustment for the income effect is incorporated. Our results suggest drinkers receive a wage penalty the size of which differs across races. Nonwhite drinkers (blacks and hispanics) face a 7.3% penalty while white drinkers receive a 3.2% penalty.

Department(s)

Mathematics and Statistics

Document Type

Article - Journal

Document Version

Citation

File Type

text

Language(s)

English

Rights

© 2006 Taylor & Francis, All rights reserved.

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