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Binge Drinking and Labor Market Success: A Longitudinal Study on Young People

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  • Keng, Shao-Hsun
  • Huffman, Wallace

Abstract

This paper presents a two equation model of joint outcomes on an individualï¾’s decision to binge drink and on his/her annual labor market earnings. The primary data source is the 1979 cohort of the National Longitudinal Survey of Youth (NLSY79), 19791994. We show that binge drinking behavior is quite alcoholprice responsive and is a rational addiction. A new result is that an individualï¾’s decision to binge drink has a statistically significant negative effect on his/her earnings. Furthermore, we conducted simulations of the shortrun and longrun impacts of increasing the alcohol price. They showed that that the tendency for an individual to binge drink heavily is reduced significantly, and the reduction is greater in the long than shortrun simulation. Also, an individualï¾’s annual earnings were increased. However, in the structural model, an individualï¾’s earnings have no significant effect on his/her tendency to engage in binge drinking. Our results contradict earlier findings from crosssection evidence that showed increased alcohol consumption raised an individualï¾’s earnings or wages.

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Bibliographic Info

Paper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 12299.

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Date of creation: 25 Apr 2005
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Publication status: Published in Journal of Population Economics, February 2007, vol. 20, pp. 35-54
Handle: RePEc:isu:genres:12299

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Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
Phone: +1 515.294.6741
Fax: +1 515.294.0221
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Web page: http://www.econ.iastate.edu
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  1. Michael Grossman & Frank J. Chaloupka & Ismail Sirtalan, 1995. "An Empirical Analysis of Alcohol Addiction: Results from the Monitoring the Future Panels," NBER Working Papers 5200, National Bureau of Economic Research, Inc.
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  4. Ziliak, J.P. & Kniesner, T.J., 1996. "The Importance of Sample Attrition in Life Cycle Labor Supply," Discussion Paper 1996-46, Tilburg University, Center for Economic Research.
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Cited by:
  1. Jason Fletcher, 2012. "Peer influences on adolescent alcohol consumption: evidence using an instrumental variables/fixed effect approach," Journal of Population Economics, Springer, vol. 25(4), pages 1265-1286, October.
  2. Chen, Zhuo & Huffman, Wallace & Rozelle, Scott, 2006. "Farm Technology and Technical Efficiency: Evidence from Four Regions in China," Staff General Research Papers 12605, Iowa State University, Department of Economics.
  3. Shao-Hsun Keng & Sheng-Jang Sheu, 2013. "The effect of stimulants and their combined use with cigarettes on mortality: the case of betel quid," The European Journal of Health Economics, Springer, vol. 14(4), pages 677-695, August.
  4. Huffman, Wallace, 2009. "Investing in People for the 21st Century," Staff General Research Papers 13127, Iowa State University, Department of Economics.
  5. Barnes, Andrew J. & Zimmerman, Frederick J., 2013. "Associations of occupational attributes and excessive drinking," Social Science & Medicine, Elsevier, vol. 92(C), pages 35-42.
  6. Nelson, Jon P., 2014. "Binge Drinking, Alcohol Prices, And Alcohol Taxes," Working Papers 164652, American Association of Wine Economists.
  7. Huang, Ying & Huffman, Wallace, 2013. "Forward Looking Decision Making: The Effects of the Food Stamp Program Participation on Women’s Obesity in the NLSY," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150264, Agricultural and Applied Economics Association.

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