Academic journal article Economic Inquiry

The Developmental Effect of State Alcohol Prohibitions at the Turn of the Twentieth Century

Academic journal article Economic Inquiry

The Developmental Effect of State Alcohol Prohibitions at the Turn of the Twentieth Century

Article excerpt

"John P. Lennon, treasurer of the American Federation of Labor, says that seventy percent of the drink bill of the United States is contributed by the American laboring man ... This means that ... liquor money is usually bread money, meat money, shoe money, and money that ought to go for clothing."

American Issue, Maryland Edition, June 12, 1909 as cited in Odegard (1928)

I. INTRODUCTION

Work by economists provides considerable evidence consistent with the fetal origins hypothesis--that various chronic health outcomes are prompted by an adverse in utero environment (e.g., Banerjee et al. 2010; Deschenes et al. 2009). (1) While the outcomes and conditions vary across studies, the underlying findings emphasize the risks associated with negative exposures during this critical development period. Most studies in the fetal origins literature exploit the variation afforded by temporary adverse in utero shocks (e.g., famines) and focus on early life outcomes (e.g., low birth weight). However, recent research in this area examines the effects in adulthood of positive in utero and childhood exposures. For example, Hoynes, Schanzenbach, and Almond (2012) find that the beneficial effects of food stamp access in utero and during childhood persist into adulthood, suggesting the potential for positive and sustained environmental changes during gestation and in early childhood to have long-lasting impacts. (2) Results from Bleakley (2007) suggest higher adult incomes among cohorts in the American South with more childhood exposure to hookworm eradication efforts. (3)

We contribute to this growing literature by exploiting the quasi-randomization of alcohol consumption created by state-level alcohol prohibition laws passed in the United States in the early part of the twentieth century. We argue that such laws represented a positive shock to individuals who were in utero or who were young children around the times of the laws' adoption. Using a large dataset of World War II enlistees, we examine the long-term effects of these state prohibition laws on adult educational attainment, obesity, and height. Although we do not observe alcohol consumption and hence our results provide intent-to-treat estimates, our design avoids the reporting problems associated with using more recent data on alcohol use. We find small but statistically significant effects, which do not appear to be the result of pre-existing trends, for two of the three outcome variables.

II. BACKGROUND

Reduced consumption of alcohol could lead to improved outcomes for those individuals in utero or in early childhood during this period through two channels. First, reduced alcohol consumption by the household members who likely consumed the most alcohol during this period, namely men, may have shifted resources to other members of the household, namely women and children. Second, reduced consumption by pregnant women themselves would reduce fetal exposure to alcohol. We provide some historical evidence on the potential relevance of these mechanisms in the context of state-level alcohol prohibitions.

A. Intrahousehold Shift in Resources to Women and Young Children

Liquor traffic as the "enemy of the home" was a favorite theme of the Anti-Saloon League and other temperance organizations of the time (Odegard, 1928, 42). (4) The suggestive titles of pamphlets distributed by such organizations included Better Babies, Unborn Children, Why Babies Die, and Boys Worth More Than Taxes. The obvious intention of such propaganda was to convey the message that the saloon culture, and the alcohol consumption that came with it, resulted in adverse outcomes for children and families that would be reversed under prohibition. Determining whether or not this reversal materialized is difficult given the lack of historical consumption data; state-level data on alcohol consumption are not available for this period. However, national data on consumption and other measures that are likely to be associated with consumption provide some evidence to suggest lower alcohol consumption in the period during which many states adopted alcohol prohibition laws. …

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