Alcohol use and wages: New results from the national household survey on drug abuse

Abstract

A recent study published in the Journal of Health Economics by French and Zarkin [French, M.T., Zarkin, G.A., 1995. Is moderate alcohol use related to wages? Evidence from four worksites, Journal of Health Economics 14, 319–344] found evidence of a positive, inverse-U-shaped relationship between wages and alcohol consumption for individuals at four worksites. In this paper, we attempted to replicate French and Zarkin's findings using a combined sample of prime-age workers from the 1991 and 1992 National Household Surveys on Drug Abuse (NHSDA). Whereas French and Zarkin found that individuals who consume approximately 1.5 to 2.5 drinks per day have higher wages than non-drinkers and heavy drinkers, we found no evidence of a turning point at this consumption level for either men or women. Our results do suggest that men who use alcohol have approximately 7% higher wages than men who do not drink, and this apparent wage premium is approximately the same over a wide range of alcohol consumption. For women, the estimated alcohol use premium is approximately half as large as for men and is statistically insignificant.