Academic journal article Journal of Economics and Economic Education Research

The Effects of Alcohol Use on School Enrollment

Academic journal article Journal of Economics and Economic Education Research

The Effects of Alcohol Use on School Enrollment

Article excerpt


In many health-related and social science fields, there has been considerable concern about the various harmful effects of alcohol use. Recent evidence indicates drinking, coupled with smoking, reduces income (Auld 2005). Another related consequence of alcohol use is the potential reduction in human capital accumulation by drinkers. This issue is particularly acute during adolescence and early adulthood, in which decisions regarding high school completion and college attendance are first considered, and academic performance realizations that affect longer-term educational and economic outcomes are initially observed. Excessive drinking has been associated with this age group despite its illegality until the age of 21. For instance, data from the 2006 and 2007 National Survey on Drug Use and Health (NSDUH) found approximately 18 percent of youths ages 15-18 (high school age) and approximately 43 percent of young adults ages 18-25 (college age) engaged in binge drinking, i.e. the consumption of at least five alcoholic beverages in one sitting, in the past month.

Several reasons might lead heavy drinking to impair human capital formation. Intoxication potentially interferes with class attendance and learning, and time spent in activities where drinking occurs could substitute away from time allocated to studying. This hurts academic performance in the short term, which might diminish the ability or incentive to continue schooling over the longer term. Risks stemming from intoxication, such as injury from accidents or fights, pregnancy and disease from unsafe sex, conflicts with parents or law enforcement, and a tarnished reputation with school authorities can also limit the capability of a student to remain in school (Cook and Moore 1993). Alternatively, social interactions associated with drinking might improve academic achievement by providing a means of relieving stress (Williams et al. 2003).

Much evidence has established a negative relationship between the regularity and intensity of drinking and human capital measures such as school completion. But distinguishing whether these relationships are causal, such that increased alcohol consumption directly reduces, for example, probable school enrollment, or merely correlational, with changes in other confounding variables simultaneously leading to drinking and lower enrollment rates, is critical.

Thus, for economists and policy makers, obtaining an accurate estimate of the magnitude of the causal effect that alcohol use has on educational outcomes should be a top priority. This task is a natural one to tackle by using econometric techniques such as instrumental variables (IV) regression--a method specifically designed to estimate the causal impact of a variable that does not otherwise vary independently with other unobserved determinants of the outcome being examined.

Why is the potential impact of alcohol use on school enrollment relevant for the discipline of economics? Human capital accumulation bears directly and heavily on earning potential and it is widely accepted that strong and statistically significant relationships link individual health and human capital formation. Moreover, variables such as school completion and enrollment are commonly examined education outcomes among broader literatures on human capital accumulation, given that they are easily measured and have a clear marginal impact on future wages that economists have long focused on estimating.


Only recently has the relationship between alcohol use and human capital accumulation been addressed by economists, and research on the topic had been fairly limited, with measures of drinking and schooling as well as conclusions varying across studies. Comparatively early research produces evidence of a negative relationship, but either makes no attempt to econometrically deal with the potential endogeneity of drinking in education equations, or does so in a way that has since been criticized as unsatisfactory, so it is unclear whether this negative correlation indeed represents declines in educational outcomes that are caused by drinking. …

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