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Does problem drinking affect employment? Evidence from England

  • Ziggy MacDonald

    (Department of Economics, University of Leicester, UK)

  • Michael A. Shields

    (Department of Economics, University of Melbourne, Australia)

In this paper, we use data from the Health Survey of England to show that problem drinking is negatively and significantly associated with the probability of being in work, once the endogenous relationship between these outcomes is accounted for. Being a problem drinker leads to a substantial reduction in the probability of working by between 7 and 31%, the former figure being roughly equivalent to the positive effect of having a degree relative to no qualifications in our data. This finding is robust to a variety of identifying restrictions and definitions of problem drinking. Moreover, we find that problem drinking defined by the observed psychological and physical symptoms of alcohol is an important predictor of employment, and allows for the fact that individuals differ in their tolerance or susceptibility to alcohol. Our results suggest that there may be important labour market benefits from public health policies aimed at the prevention and treatment of problem drinking. Copyright © 2003 John Wiley & Sons, Ltd.

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File URL: http://hdl.handle.net/10.1002/hec.816
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Article provided by John Wiley & Sons, Ltd. in its journal Health Economics.

Volume (Year): 13 (2004)
Issue (Month): 2 ()
Pages: 139-155

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Handle: RePEc:wly:hlthec:v:13:y:2004:i:2:p:139-155
Contact details of provider: Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749

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  1. Dhaval Dave & Robert Kaestner, 2001. "Alcohol Taxes and Labor Market Outcomes," NBER Working Papers 8562, National Bureau of Economic Research, Inc.
  2. French, Michael T. & Zarkin, Gary A., 1995. "Is moderate alcohol use related to wages? Evidence from four worksites," Journal of Health Economics, Elsevier, vol. 14(3), pages 319-344, August.
  3. Rivers, Douglas & Vuong, Quang H., 1988. "Limited information estimators and exogeneity tests for simultaneous probit models," Journal of Econometrics, Elsevier, vol. 39(3), pages 347-366, November.
  4. John Mullahy & Jody L. Sindelar, 1995. "Employment, Unemployment, and Problem Drinking," NBER Working Papers 5123, National Bureau of Economic Research, Inc.
  5. Jeffrey DeSimone, 1999. "Illegal Drug Use and Labor Supply," Working Papers 9906, East Carolina University, Department of Economics.
  6. James Heckman, 1997. "Instrumental Variables: A Study of Implicit Behavioral Assumptions Used in Making Program Evaluations," Journal of Human Resources, University of Wisconsin Press, vol. 32(3), pages 441-462.
  7. Weiwei Feng & Wei Zhou & J.S. Butler & Brenda M. Booth & Michael T. French, 2001. "The impact of problem drinking on employment," Health Economics, John Wiley & Sons, Ltd., vol. 10(6), pages 509-521.
  8. Vivian Hamilton & Barton H. Hamilton, 1997. "Alcohol and Earnings: Does Drinking Yield a Wage Premium," Canadian Journal of Economics, Canadian Economics Association, vol. 30(1), pages 135-51, February.
  9. Mullahy, John & Sindelar, Jody L, 1991. "Gender Differences in Labor Market Effects of Alcoholism," American Economic Review, American Economic Association, vol. 81(2), pages 161-65, May.
  10. Barrett, Garry F, 2002. "The Effect of Alcohol Consumption on Earnings," The Economic Record, The Economic Society of Australia, vol. 78(240), pages 79-96, March.
  11. Simon M. Burgess & Carol Propper, 1998. "Early health-related behaviours and their impact on later life chances: evidence from the US," Health Economics, John Wiley & Sons, Ltd., vol. 7(5), pages 381-399.
  12. 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.
  13. MacDonald, Ziggy & Pudney, Stephen, 2000. "Illicit drug use, unemployment, and occupational attainment," Journal of Health Economics, Elsevier, vol. 19(6), pages 1089-1115, November.
  14. Ziggy MacDonald & Michael Shields, . "The Impact of Alcohol Use on Occupational Attainment and Wages," Discussion Papers in Public Sector Economics 98/8, Department of Economics, University of Leicester.
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