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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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    Citations

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    Cited by:

    1. 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.
    2. Sabia, Joseph J. & Nguyen, Thanh Tam, 2016. "The Effect of Medical Marijuana Laws on Labor Market Outcomes," IZA Discussion Papers 9831, Institute for the Study of Labor (IZA).
    3. 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.
    4. 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.
    5. Ziebarth, Nicolas R. & Grabka, Markus M., 2009. "In Vino Pecunia? The Association Between Beverage-Specific Drinking Behavior and Wages," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 219-244.
    6. repec:kap:revaec:v:30:y:2017:i:4:d:10.1007_s11138-017-0402-3 is not listed on IDEAS
    7. 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.
    8. 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.
    9. 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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