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No Booze? You May Lose: Why Drinkers Earn More Money Than Nondrinkers

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  • BETHANY L. PETERS
  • EDWARD STRINGHAM

Abstract

A number of theorists assume that drinking has harmful economic effects, but data show that drinking and earnings are positively correlated. We hypothesize that drinking leads to higher earnings by increasing social capital. If drinkers have larger social networks, their earnings should increase. Examining the General Social Survey, we find that self-reported drinkers earn 10-14 percent more than abstainers, which replicates results from other data sets. We then attempt to differentiate between social and nonsocial drinking by comparing the earnings of those who frequent bars at least once per month and those who do not. We find that males who frequent bars at least once per month earn an additional 7 percent on top of the 10 percent drinkers' premium. These results suggest that social drinking leads to increased social capital.

Suggested Citation

  • Bethany L. Peters & Edward Stringham, 2006. "No Booze? You May Lose: Why Drinkers Earn More Money Than Nondrinkers," Journal of Labor Research, Transaction Publishers, vol. 27(3), pages 411-421, June.
    • Handle: RePEc:tra:jlabre:v:27:y:2006:i:3:p:411-421
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    Cited by:

    1. Masanori Kuroki, 2017. "Does Drinking in Moderation Lead to Higher Life Satisfaction?," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 12(1), pages 125-135, March.
    2. Ziebarth, Nicolas R. & Grabka, Markus M., 2009. "In Vino Pecunia? The Association Between Beverage-Specific Drinking Behavior and Wages," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 30, pages 219-244.
    3. Marco Caliendo & Juliane Hennecke, 2022. "Drinking is different! Examining the role of locus of control for alcohol consumption," Empirical Economics, Springer, vol. 63(5), pages 2785-2815, November.
    4. Pavel Chalupnicek, 2010. "The CAPITAL in Social Capital: An Austrian Perspective," American Journal of Economics and Sociology, Wiley Blackwell, vol. 69(4), pages 1230-1250, October.
    5. Trey Malone & Jayson L. Lusk, 2019. "Releasing The Trap: A Method To Reduce Inattention Bias In Survey Data With Application To U.S. Beer Taxes," Economic Inquiry, Western Economic Association International, vol. 57(1), pages 584-599, January.
    6. Adams, Scott J. & Heywood, John S. & Ullman, Darin F. & Venkatesh, Shrathinth, 2022. "Social jobs and the returns to drinking," Economics & Human Biology, Elsevier, vol. 46(C).
    7. Luis Rodrigo Arnabal, 2021. "Optimal design of sin taxes in the presence of nontaxable sin goods," Health Economics, John Wiley & Sons, Ltd., vol. 30(7), pages 1580-1599, July.
    8. 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).
    9. Batia Ben-Hador & Eyal Eckhaus & Galit Klein, 2021. "Personal Social Capital in Organizations: A New Scale to Assess Internal and External Personal Social Capital in Organizations," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 157(3), pages 1155-1177, October.
    10. Jenny Lye & Joe Hirschberg, 2010. "Alcohol Consumption And Human Capital: A Retrospective Study Of The Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 24(2), pages 309-338, April.
    11. Preety Srivastava & Xueyan Zhao, 2010. "What Do the Bingers Drink? Micro‐Unit Evidence on Negative Externalities and Drinker Characteristics of Alcohol Consumption by Beverage Types," Economic Papers, The Economic Society of Australia, vol. 29(2), pages 229-250, June.
    12. Preety Srivastava & Xueyan Zhao, 2010. "What Do the Bingers Drink? Microeconometric Evidence on Negative Externatilities of Alcohol Consumption by Beverage Types," Monash Econometrics and Business Statistics Working Papers 1/10, Monash University, Department of Econometrics and Business Statistics.
    13. Edward Peter Stringham, 2017. "The fable of the leeches, or: The single most unrealistic positive assumption of most economists," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 30(4), pages 401-413, December.
    14. Justus Haucap & Annika Herr, 2014. "A note on social drinking: In Vino Veritas," European Journal of Law and Economics, Springer, vol. 37(3), pages 381-392, June.
    15. Au, Pak Hung & Zhang, Jipeng, 2016. "Deal or no deal? The effect of alcohol drinking on bargaining," Journal of Economic Behavior & Organization, Elsevier, vol. 127(C), pages 70-86.
    16. Cerdá, Magdalena & Johnson-Lawrence, Vicki D. & Galea, Sandro, 2011. "Lifetime income patterns and alcohol consumption: Investigating the association between long- and short-term income trajectories and drinking," Social Science & Medicine, Elsevier, vol. 73(8), pages 1178-1185.
    17. Wang, Jianxin & Huang, Cailing & Xu, Lin & Zhang, Junhuan, 2023. "Drinking into friends: Alcohol drinking culture and CEO social connections," Journal of Economic Behavior & Organization, Elsevier, vol. 212(C), pages 982-995.
    18. Preety Srivastava, 2010. "Does Bingeing Affect Earnings?," The Economic Record, The Economic Society of Australia, vol. 86(275), pages 578-595, December.

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