Abstract
This article examines the effects of cocaine and marijuana use on the wages of young adults. The endogeneity of drug use in a wage equation is considered, and a two-stage least squares procedure is implemented. The results suggest that increased use of marijuana or cocaine is associated with higher wages. The positive relationship between drug use and the wage does not diminish with age. I also investigate whether systematic differences in the return to measures of human capital investments can explain the positive relationship between drug use and wages.
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