The impact of problem drinking on employment

Social cost studies report that alcohol use and misuse impose a great econo mic burden on society, and over half of the total economic costs are estima ted to be due to the loss of work productivity. Controversy remains, howeve r, as to the magnitude and direction of the effects of alcohol consumption on productivity. Furthermore, most of the studies have looked at the relati onship between problem drinking and wages. This paper investigates the impa ct of problem drinking on employment by analysing a random sample of men an d women of prime working age from six Southern states in the US (Alabama, A rkansas, Georgia, Louisiana, Mississippi and Tennessee). The data set conta ins 4898 females and 3224 males, with information on both employment and pr oblem drinking. To eliminate the bias that may result from single-equation estimation, we used a bivariate probit model to control for possible correl ation in the unobservable factors that affect both problem drinking and emp loyment. We find no significant negative association between problem drinki ng and employment for both men and women, controlling for other covariates. The findings are consistent with other research and highlight several meth odological issues. Furthermore, the study suggests that estimates of the co sts of problem drinking may be overstated owing to misleading labour supply relationships. Copyright (C) 2001 John Wiley & Sons, Ltd.