Alcohol Consumption and Long-Term Labor Market Outcomes

Abstract

This paper examines whether alcohol consumption is related to long-term labor market outcomes. We use twin data for Finnish men and women matched to register-based individual information on employment and earnings. The twin data allow us to account for the shared environmental and genetic factors. The quantity of alcohol consumption was measured by weekly average consumption using self-reported data from three surveys (1975, 1981 and 1990). The average of an individual's employment months and earnings were measured in adulthood over the period 1990–2009. The models that account for the shared environmental and genetic factors reveal that former drinkers and heavy drinkers both have almost 20% lower earnings compared with moderate drinkers. On average, former drinkers work annually approx. 1 month less over the 20-year observation period. These associations are robust to the use of covariates, such as education, pre-existing health endowment and smoking.