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Alcohol Taxes and Labor Market Outcomes

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Author Info
Dhaval Dave
Robert Kaestner

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Abstract

In this paper, we present estimates of the effect of alcohol taxes on employment, hours of work per week, and wages. These are reduced form estimates derived from a structural model linking alcohol use to labor market outcomes. The reduced form estimates are meaningful in two ways: first, they provide estimates of the effect of an important public policy tool, alcohol taxes, on labor market outcomes, and second, they can be used to evaluate hypotheses about the structural effects of alcohol use on labor market outcomes. The results of the analysis suggest that alcohol taxes are unrelated to employment, hours of work, and wages. Estimates of the effect of alcohol taxes on labor market outcomes were large and imprecise, and characterized by significant variation in sign and magnitude across samples and types of alcohol taxes. This suggests that there is a weak and indeterminate relationship between alcohol taxes and labor market outcomes. This finding implies that alcohol use does not adversely affect labor market outcomes and is inconsistent with findings from previous studies.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 8562.

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Date of creation: Oct 2001
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Publication status: published as Dave, Dhaval and Robert Kaestner. "Alcohol Taxes And Labor Market Outcomes," Journal of Health Economics, 2002, v21(3,May), 357-371.
Handle: RePEc:nbr:nberwo:8562

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I12 - Health, Education, and Welfare - - Health - - - Health Production

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  1. Manning, Willard G. & Blumberg, Linda & Moulton, Lawrence H., 1995. "The demand for alcohol: The differential response to price," Journal of Health Economics, Elsevier, vol. 14(2), pages 123-148, June. [Downloadable!] (restricted)
  2. Markowitz, Sara & Grossman, Michael, 1998. "Alcohol Regulation and Domestic Violence towards Children," Contemporary Economic Policy, Oxford University Press, vol. 16(3), pages 309-20, July.
  3. Zarkin, Gary A. & French, Michael T. & Mroz, Thomas & Bray, Jeremy W., 1998. "Alcohol use and wages: New results from the national household survey on drug abuse," Journal of Health Economics, Elsevier, vol. 17(1), pages 53-68, January. [Downloadable!] (restricted)
  4. Philip J. Cook & George Tauchen, 1982. "The Effect of Liquor Taxes on Heavy Drinking," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 379-390, Autumn. [Downloadable!] (restricted)
  5. Don Kenkel & Ping Wang, 1998. "Are Alcoholics in Bad Jobs?," NBER Working Papers 6401, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  6. Berger, Mark C & Leigh, J Paul, 1988. "The Effect of Alcohol Use on Wages," Applied Economics, Taylor and Francis Journals, vol. 20(10), pages 1343-51, October.
  7. Ruhm, Christopher J., 1996. "Alcohol policies and highway vehicle fatalities," Journal of Health Economics, Elsevier, vol. 15(4), pages 435-454, August. [Downloadable!] (restricted)
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  8. William N. Evans & Jeanne S. Ringel, 1997. "Can Higher Cigarette Taxes Improve Birth Outcomes?," NBER Working Papers 5998, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  9. 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. [Downloadable!] (restricted)
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  10. Henry Saffer & Michael Grossman, 1987. "Beer Taxes, the Legal Drinking Age, and Youth Motor Vehicle Fatalities," NBER Working Papers 1914, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  11. Robert E. Hall, 1987. "Consumption," NBER Working Papers 2265, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  1. Alison Snow Jones & David W. Richmond, 2006. "Causal effects of alcoholism on earnings: estimates from the NLSY," Health Economics, John Wiley & Sons, Ltd., vol. 15(8), pages 849-871. [Downloadable!]
  2. Parry, Ian W.H. & Laxminarayan, Ramanan & West, Sarah E., 2006. "Fiscal and Externality Rationales for Alcohol Taxes," Discussion Papers dp-06-51, Resources For the Future. [Downloadable!]
  3. Pinka Chatterji & Jeffrey DeSimone, 2006. "High School Alcohol Use and Young Adult Labor Market Outcomes," NBER Working Papers 12529, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  4. Tekin, Erdal, 2002. "Employment, Wages, and Alcohol Consumption in Russia: Evidence from Panel Data," IZA Discussion Papers 432, Institute for the Study of Labor (IZA). [Downloadable!]
  5. Ziggy MacDonald & Michael A. Shields, 2004. "Does problem drinking affect employment? Evidence from England," Health Economics, John Wiley & Sons, Ltd., vol. 13(2), pages 139-155. [Downloadable!]
  6. Ours, J.C. van, 2002. "A pint a day raises a man's pay; but smoking blows that gain away," Discussion Paper 20, Tilburg University, Center for Economic Research. [Downloadable!]
  7. van Ours, Jan C., 2002. "A pint a day raises a man’s pay; but smoking blows that gain away," IZA Discussion Papers 473, Institute for the Study of Labor (IZA). [Downloadable!]
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  8. Bethany L Peters, 2004. "Is there a wage bonus from drinking? Unobserved heterogeneity examined," Applied Economics, Taylor and Francis Journals, vol. 36(20), pages 2299-2315, November. [Downloadable!] (restricted)
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