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Keywords:

  • alcoholism;
  • productivity;
  • labor force;
  • NLSY;
  • propensity score

Abstract

Propensity score matching is used to investigate the causal relationship between alcoholism and earnings in a young cohort of males and females drawn from the 1989 and 1994 National Longitudinal Survey of Youth (NLSY) in order to investigate productivity losses attributed to alcoholism and to quantify these effects. Results suggest that there are productivity losses attributable to alcoholism; that they become more pronounced over the life cycle; and that they differ between men and women. Ways in which estimates from propensity score matching may or may not improve on instrumental variables estimates are discussed. Copyright © 2006 John Wiley & Sons, Ltd.