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Alcohol Taxes and Labor Market Outcomes

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  • Dhaval Dave
  • Robert Kaestner

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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Bibliographic Info

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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Cited by:
  1. Bethany Peters, 2004. "Is there a wage bonus from drinking? Unobserved heterogeneity examined," Applied Economics, Taylor & Francis Journals, vol. 36(20), pages 2299-2315.
  2. West, Sarah E. & Parry, Ian W.H., 2009. "Alcohol/Leisure Complementarity: Empirical Estimates and Implications for Tax Policy," Discussion Papers dp-09-09, Resources For the Future.
  3. Ruhm, Christopher J. & Jones, Alison Snow & McGeary, Kerry Anne & Kerr, William C. & Terza, Joseph V. & Greenfield, Thomas K. & Pandian, Ravi S., 2012. "What U.S. data should be used to measure the price elasticity of demand for alcohol?," Journal of Health Economics, Elsevier, vol. 31(6), pages 851-862.
  4. Jason M. Lindo & Isaac D. Swensen & Glen R. Waddell, 2011. "Alcohol and Student Performance: Estimating the Effect of Legal Access," NBER Working Papers 17637, National Bureau of Economic Research, Inc.
  5. Inas Rashad Kelly & Dhaval M. Dave & Jody L. Sindelar & William T. Gallo, 2011. "The Impact of Early Occupational Choice On Health Behaviors," NBER Working Papers 16803, National Bureau of Economic Research, Inc.
  6. Tinna Asgeirsdottir & Kerry McGeary, 2009. "Alcohol and labor supply: the case of Iceland," The European Journal of Health Economics, Springer, vol. 10(4), pages 455-465, October.
  7. 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.
  8. 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, vol. 23(5), pages 863-886, September.
  9. 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.
  10. Ours, J.C. van, 2002. "A Pint a Day Raises a Man's Pay; But Smoking Blows that Gain Away," Discussion Paper 2002-20, Tilburg University, Center for Economic Research.
  11. Mark L. Hoekstra & Scott Carrell & James West, 2008. "Does Drinking Impair College Performance? Evidence from a Regression Discontinuity Approach," Working Papers 356, University of Pittsburgh, Department of Economics, revised Jun 2008.
  12. 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.
  13. Philip J. Cook & Bethany Peters, 2005. "The Myth of the Drinker's Bonus," NBER Working Papers 11902, National Bureau of Economic Research, Inc.
  14. 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).
  15. van Ours, Jan C, 2002. "A Pint a Day Raises a Man's Pay; But Smoking Blows that Gain Away," CEPR Discussion Papers 3308, C.E.P.R. Discussion Papers.
  16. 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.

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