The economic cost of teen drinking: late graduation and lowered earnings
Article first published online: 9 OCT 2006
Copyright © 2006 John Wiley & Sons, Ltd.
Volume 16, Issue 4, pages 407–419, April 2007
How to Cite
Renna, F. (2007), The economic cost of teen drinking: late graduation and lowered earnings. Health Econ., 16: 407–419. doi: 10.1002/hec.1178
- Issue published online: 13 MAR 2007
- Article first published online: 9 OCT 2006
- Manuscript Accepted: 8 AUG 2006
- Manuscript Revised: 30 JUN 2006
- Manuscript Received: 17 OCT 2005
- binge drinking;
- high school graduation;
- labor earnings
This paper analyzes the effect that binge drinking has on the probability of graduating on time from high school and on future earnings. The analysis is conducted on students in their senior year of high school using data from the National Longitudinal Survey of Youth 1979. Importantly, the usual instruments used to correct for the endogeneity of the drinking variable are found to be robust only for women. This paper finds that heavy drinking decreases the probability of graduating on time. Binge drinking does not have a direct impact on adults' labor earnings, but graduating late results in lower labor income. Because of a late graduation, young men who binge in high school will face an earnings penalty of 1.5–1.84 percentage points. Women also face a penalty, but this seems mostly due to the fact that women who graduate late work in industries and occupations that pay less. Copyright © 2006 John Wiley & Sons, Ltd.