IDEAS home Printed from https://ideas.repec.org/a/eee/econom/v223y2021i2p454-484.html
   My bibliography  Save this article

Illegal drugs, education, and labor market outcomes

Author

Listed:
  • Mezza, Alvaro
  • Buchinsky, Moshe

Abstract

In this paper we investigate the causal effects of consuming illegal drugs on educational attainment, employment, and wages. To identify these effects we develop and estimate a dynamic structural model to jointly consider decisions of whether to consume drugs, attend school, participate in the labor force, and save.

Suggested Citation

  • Mezza, Alvaro & Buchinsky, Moshe, 2021. "Illegal drugs, education, and labor market outcomes," Journal of Econometrics, Elsevier, vol. 223(2), pages 454-484.
    • Handle: RePEc:eee:econom:v:223:y:2021:i:2:p:454-484
    DOI: 10.1016/j.jeconom.2019.03.009
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0304407620303316
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jeconom.2019.03.009?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Olivier Marie & Ulf Zölitz, 2017. "“High” Achievers? Cannabis Access and Academic Performance," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 84(3), pages 1210-1237.
    2. Robert Kaestner, 1994. "The Effect of Illicit Drug Use on the Labor Supply of Young Adults," Journal of Human Resources, University of Wisconsin Press, vol. 29(1), pages 126-155.
    3. Merlo, Antonio & Wolpin, Kenneth I., 2015. "The transition from school to jail: Youth crime and high school completion among black males," European Economic Review, Elsevier, vol. 79(C), pages 234-251.
    4. Thaler, Richard H & Shefrin, H M, 1981. "An Economic Theory of Self-Control," Journal of Political Economy, University of Chicago Press, vol. 89(2), pages 392-406, April.
    5. Faruk Gul & Wolfgang Pesendorfer, 2001. "Temptation and Self-Control," Econometrica, Econometric Society, vol. 69(6), pages 1403-1435, November.
    6. Pinka Chatterji, 2006. "Illicit drug use and educational attainment," Health Economics, John Wiley & Sons, Ltd., vol. 15(5), pages 489-511, May.
    7. Keane, Michael P & Wolpin, Kenneth I, 1994. "The Solution and Estimation of Discrete Choice Dynamic Programming Models by Simulation and Interpolation: Monte Carlo Evidence," The Review of Economics and Statistics, MIT Press, vol. 76(4), pages 648-672, November.
    8. Bound, John & Krueger, Alan B, 1991. "The Extent of Measurement Error in Longitudinal Earnings Data: Do Two Wrongs Make a Right?," Journal of Labor Economics, University of Chicago Press, vol. 9(1), pages 1-24, January.
    9. David Laibson & Andrea Repetto & Jeremy Tobacman, 2005. "Estimating Discount Functions with Consumption Choices over the Lifecycle," Levine's Bibliography 784828000000000643, UCLA Department of Economics.
    10. Anne Case & Angus Deaton, 2017. "Mortality and Morbidity in the 21st Century," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 48(1 (Spring), pages 397-476.
    11. Michael P. Keane & Robert M. Sauer, 2010. "A Computationally Practical Simulation Estimation Algorithm For Dynamic Panel Data Models With Unobserved Endogenous State Variables," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 51(4), pages 925-958, November.
    12. Jan C. van Ours, 2006. "Cannabis, cocaine and jobs," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 21(7), pages 897-917, November.
    13. Peter Arcidiacono & Holger Sieg & Frank Sloan, 2007. "Living Rationally Under The Volcano? An Empirical Analysis Of Heavy Drinking And Smoking," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 48(1), pages 37-65, February.
    14. Hanming Fang & Dan Silverman, 2009. "Time-Inconsistency And Welfare Program Participation: Evidence From The Nlsy," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 50(4), pages 1043-1077, November.
    15. Michael T. French & M. Christopher Roebuck & Pierre Kébreau Alexandre, 2001. "Illicit Drug Use, Employment, and Labor Force Participation," Southern Economic Journal, John Wiley & Sons, vol. 68(2), pages 349-368, October.
    16. Akerlof, George A, 1991. "Procrastination and Obedience," American Economic Review, American Economic Association, vol. 81(2), pages 1-19, May.
    17. Orphanides, Athanasios & Zervos, David, 1995. "Rational Addiction with Learning and Regret," Journal of Political Economy, University of Chicago Press, vol. 103(4), pages 739-758, August.
    18. James J. Heckman & Jora Stixrud & Sergio Urzua, 2006. "The Effects of Cognitive and Noncognitive Abilities on Labor Market Outcomes and Social Behavior," Journal of Labor Economics, University of Chicago Press, vol. 24(3), pages 411-482, July.
    19. Jonathan Gruber & Botond Köszegi, 2001. "Is Addiction "Rational"? Theory and Evidence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(4), pages 1261-1303.
    20. Moshe Buchinsky & Chemi Gotlibovski & Osnat Lifshitz, 2014. "Residential Location, Work Location, and Labor Market Outcomes of Immigrants in Israel," Econometrica, Econometric Society, vol. 82(3), pages 995-1054, May.
    21. Andrew M. Gill & Robert J. Michaels, 1992. "Does Drug Use Lower Wages?," ILR Review, Cornell University, ILR School, vol. 45(3), pages 419-434, April.
    22. Charles A. Register & Donald R. Williams, 1992. "Labor Market Effects of Marijuana and Cocaine Use among Young Men," ILR Review, Cornell University, ILR School, vol. 45(3), pages 435-448, April.
    23. B. Douglas Bernheim & Antonio Rangel, 2004. "Addiction and Cue-Triggered Decision Processes," American Economic Review, American Economic Association, vol. 94(5), pages 1558-1590, December.
    24. Robert Kaestner, 1994. "New Estimates of the Effect of Marijuana and Cocaine Use on Wages," ILR Review, Cornell University, ILR School, vol. 47(3), pages 454-470, April.
    25. MacDonald, Ziggy & Pudney, Stephen, 2000. "Illicit drug use, unemployment, and occupational attainment," Journal of Health Economics, Elsevier, vol. 19(6), pages 1089-1115, November.
    26. Jan C. Ours & Jenny Williams, 2015. "Cannabis Use And Its Effects On Health, Education And Labor Market Success," Journal of Economic Surveys, Wiley Blackwell, vol. 29(5), pages 993-1010, December.
    27. Daniel F. McCaffrey & Rosalie Liccardo Pacula & Bing Han & Phyllis Ellickson, 2010. "Marijuana use and high school dropout: the influence of unobservables," Health Economics, John Wiley & Sons, Ltd., vol. 19(11), pages 1281-1299, November.
    28. Michael P. Keane & Robert M. Sauer, 2009. "Classification Error in Dynamic Discrete Choice Models: Implications for Female Labor Supply Behavior," Econometrica, Econometric Society, vol. 77(3), pages 975-991, May.
    29. Poterba, James M & Summers, Lawrence H, 1986. "Reporting Errors and Labor Market Dynamics," Econometrica, Econometric Society, vol. 54(6), pages 1319-1338, November.
    30. Jeanne S. Ringel & Phyllis L. Ellickson & Rebecca L. Collins, 2006. "The Relationship Between High School Marijuana Use And Annual Earnings Among Young Adult Males," Contemporary Economic Policy, Western Economic Association International, vol. 24(1), pages 52-63, January.
    31. Orphanides, Athanasios & Zervos, David, 1998. "Myopia and Addictive Behaviour," Economic Journal, Royal Economic Society, vol. 108(446), pages 75-91, January.
    32. Kaestner, Robert, 1991. "The Effect of Illicit Drug Use on the Wages of Young Adults," Journal of Labor Economics, University of Chicago Press, vol. 9(4), pages 381-412, October.
    33. Fernando S. Machado & Rajiv K. Sinha, 2007. "Smoking Cessation: A Model of Planned vs. Actual Behavior for Time-Inconsistent Consumers," Marketing Science, INFORMS, vol. 26(6), pages 834-850, 11-12.
    34. Becker, Gary S & Murphy, Kevin M, 1988. "A Theory of Rational Addiction," Journal of Political Economy, University of Chicago Press, vol. 96(4), pages 675-700, August.
    35. Simon M. Burgess & Carol Propper, 1998. "Early health‐related behaviours and their impact on later life chances: evidence from the US," Health Economics, John Wiley & Sons, Ltd., vol. 7(5), pages 381-399, August.
    36. David Laibson, 1997. "Golden Eggs and Hyperbolic Discounting," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(2), pages 443-478.
    37. Alan B. Krueger, 2017. "Where Have All the Workers Gone? An Inquiry into the Decline of the U.S. Labor Force Participation Rate," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 48(2 (Fall)), pages 1-87.
    38. Pollak, Robert A, 1970. "Habit Formation and Dynamic Demand Functions," Journal of Political Economy, University of Chicago Press, vol. 78(4), pages 745-763, Part I Ju.
    39. Stigler, George J & Becker, Gary S, 1977. "De Gustibus Non Est Disputandum," American Economic Review, American Economic Association, vol. 67(2), pages 76-90, March.
    40. Jeff DeSimone, 2002. "Illegal Drug Use and Employment," Journal of Labor Economics, University of Chicago Press, vol. 20(4), pages 952-977, October.
    41. Keane, Michael P & Wolpin, Kenneth I, 2001. "The Effect of Parental Transfers and Borrowing Constraints on Educational Attainment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 42(4), pages 1051-1103, November.
    42. Winston, Gordon C., 1980. "Addiction and backsliding : A theory of compulsive consumption," Journal of Economic Behavior & Organization, Elsevier, vol. 1(4), pages 295-324, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jakub Lonsky & Isabel Ruiz & Carlos Vargas-Silva, 2022. "Trade Networks, Heroin Markets, and the Labor Market Outcomes of Vietnam Veterans," Working Papers 202203, University of Liverpool, Department of Economics.
    2. Lonsky, Jakub & Ruiz, Isabel & Vargas-Silva, Carlos, 2022. "Trade networks, heroin markets, and the labor market outcomes of Vietnam veterans," Labour Economics, Elsevier, vol. 78(C).
    3. Hansen, Jörgen & Davalloo, Golnaz, 2023. "Persistent Marijuana Use: Evidence from the NLSY," IZA Discussion Papers 16446, Institute of Labor Economics (IZA).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jan C. Ours & Jenny Williams, 2015. "Cannabis Use And Its Effects On Health, Education And Labor Market Success," Journal of Economic Surveys, Wiley Blackwell, vol. 29(5), pages 993-1010, December.
    2. Ziggy MacDonald, 2004. "What Price Drug Use? The Contribution of Economics to an Evidence‐Based Drugs Policy," Journal of Economic Surveys, Wiley Blackwell, vol. 18(2), pages 113-152, April.
    3. Sophie Massin, 2011. "La notion d'addiction en économie : La théorie du choix rationnel à l'épreuve," Revue d'économie politique, Dalloz, vol. 121(5), pages 713-750.
    4. Williams, Jenny & van Ours, Jan C., 2017. "Early Cannabis Use and School to Work Transition of Young Men," IZA Discussion Papers 10488, Institute of Labor Economics (IZA).
    5. Jenny Williams & Christopher Skeels, 2006. "The Impact of Cannabis Use on Health," De Economist, Springer, vol. 154(4), pages 517-546, December.
    6. Peter Arcidiacono, Holger Sieg, Frank Sloan, 2001. "Living Rationally Under the Volcano? Heavy Drinking and Smoking Among the Elderly," Computing in Economics and Finance 2001 207, Society for Computational Economics.
    7. Sabia, Joseph J. & Nguyen, Thanh Tam, 2016. "The Effect of Medical Marijuana Laws on Labor Market Outcomes," IZA Discussion Papers 9831, Institute of Labor Economics (IZA).
    8. Pudney, Stephen & Bryan, Mark & DelBono, Emilia, 2013. "Licensing and regulation of the cannabis market in England and Wales: Towards a cost-benefit analysis," MPRA Paper 50365, University Library of Munich, Germany.
    9. Michael T. French & Ioana Popovici, 2011. "That instrument is lousy! In search of agreement when using instrumental variables estimation in substance use research," Health Economics, John Wiley & Sons, Ltd., vol. 20(2), pages 127-146, February.
    10. Jenny Williams & Jan C. van Ours, 2020. "Hazardous or not? Cannabis use and early labor market experiences of young men," Health Economics, John Wiley & Sons, Ltd., vol. 29(10), pages 1148-1160, October.
    11. Ziggy MacDonald & Stephen Pudney, 2001. "Illicit drug use and labour market achievement: evidence from the UK," Applied Economics, Taylor & Francis Journals, vol. 33(13), pages 1655-1668.
    12. Ciccarelli, Carlo & Giamboni, Luigi & Waldmann, Robert, 2007. "Cigarette smoking, pregnancy, forward looking behavior and dynamic inconsistency," MPRA Paper 8878, University Library of Munich, Germany.
    13. Peter Arcidiacono & Holger Sieg & Frank Sloan, 2007. "Living Rationally Under The Volcano? An Empirical Analysis Of Heavy Drinking And Smoking," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 48(1), pages 37-65, February.
    14. Ziggy MacDonald & Michael Shields, "undated". "The Impact of Alcohol Use on Occupational Attainment and Wages," Discussion Papers in Public Sector Economics 98/8, Division of Economics, School of Business, University of Leicester.
    15. B. Douglas Bernheim & Antonio Rangel, 2005. "Behavioral Public Economics: Welfare and Policy Analysis with Non-Standard Decision-Makers," NBER Working Papers 11518, National Bureau of Economic Research, Inc.
    16. Pierre Kébreau Alexandre & Michael T. French, 2004. "Further Evidence on the Labor Market Effects of Addiction: Chronic Drug Use and Employment in Metropolitan Miami," Contemporary Economic Policy, Western Economic Association International, vol. 22(3), pages 382-393, July.
    17. Méder, Zsombor Z. & Flesch, János & Peeters, Ronald, 2017. "Naiveté and sophistication in dynamic inconsistency," Mathematical Social Sciences, Elsevier, vol. 87(C), pages 40-54.
    18. Robert Kaestner, 1995. "The Effects of Cocaine and Marijuana Use on Marriage and Marital Stability," NBER Working Papers 5038, National Bureau of Economic Research, Inc.
    19. Jan C. van Ours, 2006. "Cannabis, cocaine and jobs," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 21(7), pages 897-917.
    20. Carlos Casacuberta & Mariana Gerstenblüth & Patricia Triunfo, 2012. "Aportes del análisis económico al estudio de las drogas," Documentos de Trabajo (working papers) 0112, Department of Economics - dECON.

    More about this item

    Keywords

    Illegal drugs; Educational attainment; Employment; Wages; Structural estimation;
    All these keywords.

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:econom:v:223:y:2021:i:2:p:454-484. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/jeconom .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.