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The economic cost of teen drinking: late graduation and lowered earnings


  • Francesco Renna

    (Department of Economics, The University of Akron, USA)


This paper analyzes the effect that binge drinking has on the probability of graduating on time from high school and on future earnings. The analysis is conducted on students in their senior year of high school using data from the National Longitudinal Survey of Youth 1979. Importantly, the usual instruments used to correct for the endogeneity of the drinking variable are found to be robust only for women. This paper finds that heavy drinking decreases the probability of graduating on time. Binge drinking does not have a direct impact on adults' labor earnings, but graduating late results in lower labor income. Because of a late graduation, young men who binge in high school will face an earnings penalty of 1.5-1.84 percentage points. Women also face a penalty, but this seems mostly due to the fact that women who graduate late work in industries and occupations that pay less. Copyright © 2006 John Wiley & Sons, Ltd.

Suggested Citation

  • Francesco Renna, 2007. "The economic cost of teen drinking: late graduation and lowered earnings," Health Economics, John Wiley & Sons, Ltd., vol. 16(4), pages 407-419.
  • Handle: RePEc:wly:hlthec:v:16:y:2007:i:4:p:407-419 DOI: 10.1002/hec.1178

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    References listed on IDEAS

    1. Pinka Chatterji & Jeff DeSimone, 2005. "Adolescent Drinking and High School Dropout," NBER Working Papers 11337, National Bureau of Economic Research, Inc.
    2. repec:aph:ajpbhl:1993:83:6:830-837_8 is not listed on IDEAS
    3. Jenny Williams & Lisa Powell & Henry Wechsler, 2003. "Does alcohol consumption reduce human capital accumulation? Evidence from the College Alcohol Study," Applied Economics, Taylor & Francis Journals, vol. 35(10), pages 1227-1239.
    4. Kenneth Bollen & David Guilkey & Thomas Mroz, 1995. "Binary outcomes and endogenous explanatory variables: Tests and solutions with an application to the demand for contraceptive use in tunisia," Demography, Springer;Population Association of America (PAA), vol. 32(1), pages 111-131, February.
    5. Gary S. Becker, 1962. "Investment in Human Capital: A Theoretical Analysis," Journal of Political Economy, University of Chicago Press, vol. 70, pages 1-9.
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    Cited by:

    1. Ji Yan & Sally Brocksen, 2013. "Adolescent risk perception, substance use, and educational attainment," Journal of Risk Research, Taylor & Francis Journals, vol. 16(8), pages 1037-1055, September.
    2. Robert Metcalfe & Simon Burgess and Steven Proud, 2011. "Student effort and educational attainment: Using the England football team to identify the education production function," Economics Series Working Papers 586, University of Oxford, Department of Economics.
    3. Nelson, Jon P., 2014. "Binge Drinking, Alcohol Prices, And Alcohol Taxes," Working Papers 164652, American Association of Wine Economists.
    4. Balsa, Ana I. & Giuliano, Laura M. & French, Michael T., 2011. "The effects of alcohol use on academic achievement in high school," Economics of Education Review, Elsevier, vol. 30(1), pages 1-15, February.
    5. Cuffe, Harold E. & Gibbs, Christopher G., 2017. "The effect of payday lending restrictions on liquor sales," Journal of Banking & Finance, Elsevier, vol. 85(C), pages 132-145.
    6. Cowan, Benjamin W., 2011. "Forward-thinking teens: The effects of college costs on adolescent risky behavior," Economics of Education Review, Elsevier, vol. 30(5), pages 813-825, October.
    7. Sabia, Joseph J. & Rees, Daniel I., 2011. "Individual heterogeneity and reverse causality in the relationship between migraine headache and educational attainment," Economics of Education Review, Elsevier, vol. 30(5), pages 913-923, October.
    8. Waddell, Glen R., 2010. "Gender and the Influence of Peer Alcohol Consumption on Adolescent Sexual Activity," IZA Discussion Papers 4880, Institute for the Study of Labor (IZA).

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