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Employment, Wages, and Alcohol Consumption in Russia: Evidence from Panel Data

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  • Tekin, Erdal

    ()
    (American University)

Abstract

This paper examines the effects of alcohol consumption on employment and wages for males and females in Russia. Both cross sectional and fixed-effects models are estimated utilizing data from the Russia Longitudinal Monitoring Survey. The results from the models that do not control for unobserved heterogeneity indicate that alcohol consumption has a positive impact on employment and wages. Further, there is some evidence in favor of an inverse U-shaped relationship between alcohol consumption and the labor market outcomes. Once the unobserved heterogeneity is controlled for using fixed effects, the positive association diminishes for the employment models for males and females. For the wage models, controlling for unobserved heterogeneity strengthens the positive impact of alcohol consumption both in significance and magnitude for males, while the reverse is true for females. However, the inverse U-shaped relationship obtained in cross-sectional models no longer exists. The results underline that unobserved heterogeneity plays an important role on the relationship between alcohol consumption and labor market behavior for both males and females. The findings are robust to model specifications and various alcohol consumption measures.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 432.

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Length: 51 pages
Date of creation: Feb 2002
Date of revision:
Publication status: published in: Southern Economic Journal, 2004, 71 (2), 397-417
Handle: RePEc:iza:izadps:dp432

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Keywords: Russia; wages; Employment; alcohol consumption;

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References

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  1. MacDonald, Ziggy & Shields, Michael A., 2000. "The Impact of Alcohol Consumption on Occupational Attainment in England," IZA Discussion Papers 166, Institute for the Study of Labor (IZA).
  2. Mullahy, John & Sindelar, Jody L, 1991. "Gender Differences in Labor Market Effects of Alcoholism," American Economic Review, American Economic Association, American Economic Association, vol. 81(2), pages 161-65, May.
  3. Andrew M. Gill & Robert J. Michaels, 1992. "Does drug use lower wages?," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 45(3), pages 419-434, April.
  4. Mullahy, John & Sindelar, Jody, 1996. "Employment, unemployment, and problem drinking," Journal of Health Economics, Elsevier, Elsevier, vol. 15(4), pages 409-434, August.
  5. Dhaval Dave & Robert Kaestner, 2001. "Alcohol Taxes and Labor Market Outcomes," NBER Working Papers 8562, National Bureau of Economic Research, Inc.
  6. French, Michael T. & Zarkin, Gary A., 1995. "Is moderate alcohol use related to wages? Evidence from four worksites," Journal of Health Economics, Elsevier, Elsevier, vol. 14(3), pages 319-344, August.
  7. Heckman, James J, 1979. "Sample Selection Bias as a Specification Error," Econometrica, Econometric Society, Econometric Society, vol. 47(1), pages 153-61, January.
  8. Vivian Hamilton & Barton H. Hamilton, 1997. "Alcohol and Earnings: Does Drinking Yield a Wage Premium," Canadian Journal of Economics, Canadian Economics Association, Canadian Economics Association, vol. 30(1), pages 135-51, February.
  9. Robert Kaestner, 1990. "The Effect of Illicit Drug Use on the Wages of Young Adults," NBER Working Papers 3535, National Bureau of Economic Research, Inc.
  10. Gary S. Becker & Kevin M. Murphy, 1986. "A Theory of Rational Addiction," University of Chicago - George G. Stigler Center for Study of Economy and State, Chicago - Center for Study of Economy and State 41, Chicago - Center for Study of Economy and State.
  11. Robert E. Hall, 1987. "Consumption," NBER Working Papers 2265, National Bureau of Economic Research, Inc.
  12. Mullahy, John & Sindelar, Jody L, 1993. "Alcoholism, Work, and Income," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 11(3), pages 494-520, July.
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Cited by:
  1. Kim, Vitally, 2010. "Level of alcohol consumption and worker’s labor market position. Multivariate probit model approach," Applied Econometrics, Publishing House "SINERGIA PRESS", Publishing House "SINERGIA PRESS", vol. 18(2), pages 53-77.
  2. Yuriy Andrienko & A. Nemtsov, 2006. "Estimation of Individual Demand for Alcohol," Working Papers w0089, Center for Economic and Financial Research (CEFIR).
  3. Heineck, Guido & Schwarze, Johannes, 2003. "Substance Use and Earnings: The Case of Smokers in Germany," IZA Discussion Papers 743, Institute for the Study of Labor (IZA).
  4. van Ours, Jan C., 2004. "A pint a day raises a man's pay; but smoking blows that gain away," Journal of Health Economics, Elsevier, Elsevier, vol. 23(5), pages 863-886, September.

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