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Keywords:

  • illicit drug use;
  • education;
  • human capital

Abstract

This paper uses data from the National Education Longitudinal Study to estimate the association between illicit drug use during high school and the number of years of schooling completed. The analysis accounts for the possibility that drug use is endogenous using two methods: (1) by controlling for individual-level characteristics measured before high school entrance; and (2) by using an instrumental variables method, with state drug policies and 8th grade school characteristics as identifying variables. Findings suggest that marijuana use and cocaine use in high school are associated with reductions in the number of years of schooling completed. Copyright © 2005 John Wiley & Sons, Ltd.