According to the medical community a host of ills accompanies prolonged alcohol use including memory loss, motor dysfunction, and impaired judgment. While deduction suggests alcohol use would reduce wages, past empirical studies find differently. For example, M. Berger and J. Leigh (1988) find a 32 percent wage premium for drinkers. The author's study differs in two ways. First, self-selection is corrected using observed variables and secondly, an adjustment for the income effect is incorporated. Their results suggest drinkers receive a wage penalty the size of which differs across races. Nonwhite drinkers (blacks and Hispanics) face a 7.3 percent penalty while white drinkers receive a 3.2 percent penalty. Copyright 1992 by Taylor and Francis Group
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